Fitch places the Alliance Oil ratings to the Rating Watch «Negative» list.

The international rating agency Fitch Ratings placed long-term issuer default rating ("IDR") Alliance Oil Company Ltd. («AOIL») in foreign and local currency «B» on the  Rating Watch «Negative» list because of the expectations that the acquisition of the company by the Alliance Group may significantly affect the AOIL financial policies and potentially lead to a significant deterioration in the credit portfolio, Fitch reported.

According to this information, the private Alliance Group, which owned 45% of AOIL, bought the remaining shares in December 2013, and then delisted the company. Alliance Group had drawn a short-term loan in the amount of $ 1.2 billion to finance the deal, and although the lenders of Alliance Group do not legally have recourse to AOIL, we believe that the Alliance Group may need to change AOIL fiscal policy for debt servicing. Such changes may include a departure from the policy of zero dividend payments and/or provide financial guarantees, as the result the adjusted leverage on funds from operations (FFO) in AOIL may exceed the Fitch trigger for negative rating action at 5x.

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