Standard & Poor’s (S&P) has downgraded the credit rating of Azerbaijan’s Baghlan Group FZCO from "B" to "B-" and withdrew the rating from CreditWatch.
S&P also said the company’s rating outlook is "Negative".
"The downgrade reflects the lack of proactive management of liquidity and insufficiently adequate, in our view, risk management and information disclosure by the Company," the agency said.
In October 2013 Baghlan allowed a technical delay on some payments to repay financial debt that was associated with weak payment culture of Azerbaijan and unforeseen problems with liquidity in the banking system during long public holidays.
"As far as we know, to date all payments have been made, the bank paid a fine to Baghlan for late payments, and the event of default or cross-default did not occur. Nevertheless, in our opinion, this fact shows that in this case Baghlan failed to solve timely the problem associated with deficiencies of the national banking system. We withdraw Baghlan’s rating from list CreditWatch, as we think that the recently-finished sale of residential property for 100 million (as we understand, AZN 40 million has already been received, and the rest sum should be received during 2014) helps the Company to maintain liquidity for the short term," S&P said.
ANN.Az
