Research Update: Integrated Utility Energo-Pro 'B+' Rating Placed On CreditWatch Developing On Acquisition Of Western European Assets

On Sept. 27, 2023, Energo-Pro a.s. (EPas) announced the acquisition of Western European-based hydro generators. S&P Global Ratings expects the acquisition to add about €60 million-€70 million to EPas' EBITDA, offsetting the expected reduction in Georgian and Bulgarian EBITDA. To finance the acquisition, EPas contracted a €300 million nine-month revolving bridge loan, which we expect will be refinanced with a senior unsecured bond. At the same time, after strong 2022 results (EBITDA up nearly €100 million from 2021), EPas continues to benefit from high power prices. EBITDA rose 52% in first-half 2023 and could reach €290 million-€310 million by year-end. This should translate into S&P Global Ratings-adjusted funds from operations (FFO) to debt remaining higher than 20% over 2023-2024, despite

...- On Sept. 27, 2023, Energo-Pro a.s. (EPas) announced the acquisition of Western European-based hydro generators. S&P Global Ratings expects the acquisition to add about 60 million-70 million to EPas' EBITDA, offsetting the expected reduction in Georgian and Bulgarian EBITDA. To finance the acquisition, EPas contracted a 300 million nine-month revolving bridge loan, which we expect will be refinanced with a senior unsecured bond. - At the same time, after strong 2022 results (EBITDA up nearly 100 million from 2021), EPas continues to benefit from high power prices. EBITDA rose 52% in first-half 2023 and could reach 290 million-310 million by year-end. This should translate into S&P Global Ratings-adjusted funds from operations (FFO) to debt remaining higher than 20% over 2023-2024, despite the acquisition. - We therefore placed our 'B+' long-term issuer credit rating on EPas on CreditWatch with developing implications. Ratings on senior unsecured bonds were affirmed at 'B+'. - The developing...

Research Update