MOSCOW (MRC) -- Fitch Ratings has revised its outlooks on Turkey’s major petrochemical producer Petkim and largest Turkish refiner Tupras to negative from stable, said American corporation.
The move follows Fitch’s recent sovereign rating action that downgraded Turkey to 'B+', four notches below investment grade, with a negative outlook. Turkey is mired in an economic crisis that sent the official annual inflation figure to 49% at the end of January. The Turkish lira struggling to hold ground against the US dollar. The Turkish currency lost 44% of its value against the dollar in 2021.
Fitch, in a notice released on Thursday, revised the outlook on Petkim’s long term foreign currency (LT FC) issuer default rating (IDR) to negative from stable, while also affirming the company’s 'B+' rating. “Petkim's LT FC IDR is constrained by the Country Ceiling, due to the company's sizeable exposure to the Turkish economy,” Fitch said.
In the same notice, Fitch revised the outlooks on Tupras’ LT FC and long-term local-currency (LT LC) IDRs to negative from stable and affirmed the refiner’s 'B+' ratings.
"Tupras's LT LC IDR is constrained by Turkey's LT LC IDR, due to the company's large domestic operations and significant cash holdings in Turkish banks due to preferable interest rates. Weakening of the credit profiles of Turkish banks could also affect Tupras's access to liquidity sources," Fitch said.
As per MRC, Petkim, whose majority shareholder is Azerbaijan's SOCAR, plans to start capital planned maintenance work at a polyvinyl chloride (PVC) plant in Aliaga (Turkey) in the fourth quarter of this year. It is expected that scheduled maintenance activities at this facility with a capacity of 157 thousand tons of PVC per year will continue for about six months. Thus, this plant should return to work again in the second quarter of 2023.
Petkim Petrokimya Holding A.S. - Turkish chemical company. The owner of the controlling stake in the company (51.39%) is the State Oil Company of the Republic of Azerbaijan (SOCAR). The remaining shares are owned by TURCAS. The company produces polymers (PE, PP, PVC, PA), detergents, packaging, etc.