Fitch Ratings places UNITEDENERGY GP on negative rating watch

Fitch Ratings has placed the long-term issuer default rating of UNITEDENERGY GP (00467.HK) on Rating Watch Negative (RWN). At the same time, the company's senior unsecured rating of "BB-" has also been placed on Rating Watch Negative.

Fitch believes that this rating action reflects the long-term closure of the Strait of Hormuz, which will expose UNITEDENERGY GP to significant operational risks that could severely weaken its business and financial condition.

Fitch expects that by the end of 2025, UNITEDENERGY GP will have sufficient cash on hand to fully cover its short-term debt, and there will be no large one-time loan repayments due within the next 12 months. Additionally, given the flexibility of the company's capital expenditure plans, Fitch anticipates that the company's working capital will not face significant pressure. Fitch expects that UNITEDENERGY GP's investments in Uzbekistan will be covered by matching project loans, with no additional financing needs.

Fitch will closely monitor developments in the security situation in Iraq and the status of the Strait of Hormuz. A deterioration in the operating environment (including a long-term closure of the Strait) could prevent UNITEDENERGY GP from operating its assets in Iraq and may trigger negative rating actions