The ‘B+’ long-term corporate credit ratings on Russian vertically integrated oil company OAO Siberian Oil Co (Sibneft) remain on Standard & Poor’s CreditWatch with positive implications, following the announcement that another Russian oil company, OAO NK Yukos (BB/Stable/–), has taken ownership of a 92% interest, thereby completing an important step in the merger process of the two companies.
The ratings on Sibneft were originally placed on CreditWatch with positive implications on April 22, 2003, following the announcement of an agreement in principle between the core shareholders of Sibneft and Yukos to combine their businesses.
“Standard & Poor’s believes the ratings on Sibneft will most likely converge with the ratings on the combined entity, to be named YukosSibneft, unless Sibneft’s creditors are disadvantaged by the structure of the combination,” says Standard & Poor’s credit analyst Elena Anankina. “The CreditWatch status will be resolved once shareholder meetings at both companies have been held and when the status of Sibneft’s assets and debt within the new structure is clarified.”
The amount of interim dividends paid and confirmation of the financial policy that the new YukosSibneft group will follow will also be important factors for the CreditWatch resolution.
Although a possible acquisition of a stake in YukosSibneft by a western oil major has been widely discussed in the media, Standard & Poor’s will not comment on its possible rating implications until it is clear that the transaction has a high probability of occurring and its consequences are thoroughly evaluated.