For 2024, the risk rating agency has projected an Ebitda of US$ 119 million, compared to debt payments that amount to US$ 175 million.
Fitch Ratings downgraded the credit rating of the Peruvian state oil company Petroperú from B+ to CCC+, arguing that it faces a serious liquidity crisis since the cash it is expected to generate in 2024 will not be enough to cover its debt payments.
"The company is forced to rely heavily on external financing sources to avoid default. Fitch has projected an Ebitda of US$119 million by 2024 against debt payments amounting to US$175 million," says the rating agency. risk in a report.
According to Fitch's analysis, Petroperú experiences a monthly cash burn rate of around US$200 million during this period, while the Talara refinery remains non-operational.
"This leads to a projected cash shortfall of US$280 million, even after receiving an US$800 million loan disbursed earlier in the year, evidencing a liquidity strain that could lead to a default-like event." that reflects a cc rating," says Fitch.
The news of the credit rating downgrade comes hours after the Ministry of Economy and Finance (MEF) of Peru sent an important fact to Fitch Ratings guaranteeing that the Government of Dina Boluarte will continue to economically and financially support the oil company with in order to promote its sustainability. Meanwhile, the Minister of Energy and Mines, Rómulo Mucho, expressed that it will be necessary to continue supporting Petroperú in the face of the credit rating downgrade.
In that sense, Fitch does not anticipate substantial support from the national government for Petroperú's capital structure in the short term. For the rating agency, although the government provided liquidity in 2022 to meet immediate needs, these measures did not address the fundamental problem of high debt.
In addition, it notes that operational challenges related to the completion schedule of the Talara Refinery and the cash demands of its start-up have led to greater financial needs that the company must meet from external sources in 2024.
"Petroperú has requested US$2.5 billion from the government and has received a lukewarm response: a loan of US$800 million from Banco de la Nación and an increase in existing guarantees from US$500 million to US$1 billion. These measures address immediate liquidity problems, but do not resolve the structural deficiencies of the balance sheet," concludes the Fitch report.
