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AFK Sistema to keep fulfilling its loan obligations in full

September 19, 2014, 0:10 UTC+3 MOSCOW
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MOSCOW, September 18. /ITAR-TASS/. Russian services conglomerate AFK Sistema has fulfilled and will keep fulfilling its loan and other obligations in full, senior vice-president and head of finance and investment of Sistema, Vsevolod Rozanov, said Thursday as quoted by the company's press service.

“The rating action [by Moody’s and Fitch] is not connected with deterioration of the financial condition of AFK Sistema and its subsidiaries,” Rozanov said.

“The group’s key financial indices show very positive dynamics, which can be judged by solid results of this year’s second quarter,” he said.

Moody’s Investors Service on Thursday said it placed on review for downgrade the Ba2 corporate family rating (CFR) and the Ba2-PD probability of default rating (PDR) of AFK Sistema and the Ba2 CFR and the Ba2-PD PDR of Bashneft, which is Sistema’s 74-percent subsidiary.

The rating action came after news that Sistema chairman Vladimir Yevtushenkov was placed on September 16 under house arrest on suspicion of involvement in a money-laundering scheme with the assets of oil companies in the Urals Republic of Bashkortostan, which are now part of Bashneft oil producer controlled by the tycoon.

Earlier, Fitch Ratings put the ratings of AFK Sistema and its subsidiaries - mobile operator MTS, Bashneft and bank MTS Bank - on Rating Watch Negative, according to the ratings agency’s statement released Thursday.

The stocks of firms owned by Yevtushenkov plummeted on Wednesday on news of his arrest, with public companies integrated into Sistema losing over $5.5 billion in their market value.

The Sistema chairman, who may be sentenced to seven years in prison, has rejected all the accusations and insists on his innocence.

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