Fitch Ratings affirmed long-term ratings of TGC-1 at 'ВВ+' level

02.10.2017

On 29 September 2017, Fitch Ratings affirmed long-term Issuer Default Rating (IDR) of TGC-1 in foreign and national currency at 'ВВ+' level, Outlook Stable, and short-term Issuer Default Rating in foreign and national currency at 'В' level.

The affirmation of the ratings is based on the forecast of TGC-1's strong operating performance that reflects the Company's profit growth due to the revenue received under Capacity Supply Agreements (CSA) despite relatively high capital expenditures and payment of dividends, which will allow TGC-1's credit indicators to remain within rating guidelines.

The agency forecasts the positive tariff dynamics in 2017–2018 since new power generating units commissioned in 2009–2012 start the last four years of a ten-year payback period for new capacities. The rating also takes into account the Company's favourable geography of operations, strong market position in electricity and heat sales in St. Petersburg and the surrounding  regions, as well as the significant proportion of hydroelectric generation in the Company's business assets which is notable for low-cost production of electricity.

About

TGC-1 is the leading producer of electricity and heat in the North-West region of Russia. It operates 53 electric generating stations in four regions of Russia: St. Petersburg, Republic of Karelia, Leningrad Oblast, and Murmansk Oblast.

TGC-1 installed electric capacity of the Company’s stations amounts to 6.95 GW and heating capacity of 14,53 thous. GCal/hr. Major shareholders are Gazprom Energoholding LLC (51.79 %) and Fortum Power and Heat Oy (29.45 %). Total headcount of the Company, including subsidiaries, totals circa 7 thousand.