Standard & Poor's has also downgraded OMZ's credit and senior unsecured corporate debt ratings from "ruBBB-" to "ruBB," on the national rating scale. The ratings revision reflects OMZ's weakening liquidity position and S&P's fears that the failed merger will undermine the company's financial state and market competitiveness. This arises from the assumption that since the merger was announced last December, OMZ has been operating to meet the needs of the merged company, including strategic priorities in sales and purchases as well as financial policies, the S&P's press release quotes credit analyst Tatyana Kordyukova as saying.
Along with risks arising from the termination of the merger agreement, there are also ones related to OMZ's additional acquisitions and sell-offs. According to S&P's, the company has begun selling off units deemed unassociated with the merged company's main product lines (those units brought in 40 percent of the company's gross earnings last year). The Czech company Skoda has shown interest in buying the units.
Standard & Poor's says in the press release that it will be meticulously analyzing the company's standing in terms of the availability of liquidity resources, something that poses the main short-term risk for OMZ, and also the implications of the terminated merger deal for the company's mid-term and long-term creditworthiness.
S&P's is now awaiting additional explanations from the top management of OMZ so as to have the basis for a decision on the company's CreditWatch status.
