Fitch doubts Ukrasalizitsia’s ability to repay multi-billion dollar debt
The “B” of the short-term issuer default rating (IDR) Ukrzaliznytsia went into the ratings watch list “negative” due to low liquidity and caused a decline in the outlook on Ukraine’s sovereign rating in the “Stable,” Fitch rating report.
The rating change reflects the agency’s opinion about the decrease in liquidity of the company available for use, as well as the negative impact of the coronovirus epidemic on the nation’s economy.
According to experts, the available liquidity of Ukrzaliznytsia (UAH 5.74 billion at the end of April) is insufficient to cover expected debt payments with maturity in 2020.
Ukrzaliznytsia’s debt stabilized at 32.65 billion UAH at the end of 2019. In 2019, the company’s debt was 55.8% Euro and 91.2% foreign currency.
Among other things, Ukraine’s financial profile is still exposed to risks associated with the commodity market and currency fluctuations, geopolitical problems associated with bilateral relations with Russia.
The agency also states that a potential decrease of 12.5% in operating income is expected in 2020, with an expected average increase of 8.2% in 2021–2024. In addition, operating expenses are expected to increase by an average of 6.8% in 2020–2024.
Summary PAYSPACE magazine
Recall that in Ukrzaliznytsya the Ukrainians decided to compensate for 100% of the cost of tickets for all trains that were to leave after the start of quarantine.
Also, passengers who have purchased tickets at the box office can return them through the box office or after quarantine. They promise to return the money for tickets for domestic routes within 90 days from the planned departure date, and for international ones within 180 days.
Read: When Trains Are Launched: Ukrzizitsia has revealed an anti-crisis plan.