Standard & Poor’s Ratings Services says that its ratings and outlook on Russian oil company OAO NK Yukos (BB/Stable/–) are not affected by the company’s announced share buyback of up to 10% (224mn) of Yukos shares for a total consideration of up to US$3.7bn. The buyback is part of Yukos’ merger process with OAO Siberian Oil Co (Sibneft; B+/Watch Pos/–).
“The ratings on Yukos already anticipated significant distributions to shareholders before the merger with Sibneft is finalized,” says Standard & Poor’s credit analyst Elena Anankina. “Standard & Poor’s expects strong cashflow generation and significant liquidity reserves will enable the combined entity, to be named YukosSibneft, to keep a moderate total debt burden of less than US$6.5bn-7bn after the merger is finalised and distributions to shareholders are made.”
Standard & Poor’s will continue to closely monitor the progress of the merger as well as the group’s financial policy and debt and liquidity positions.