Fitch Ratings has assigned Telasi JSC, an electricity distribution company in Georgia, an expected first-time Long-Term Issuer Default Rating (IDR) of 'B+(EXP)' with Stable Outlook.
The assignment of final rating is contingent on the company's successful local bond issue and refinancing as proposed by management in their business plan.
The rating is constrained by the execution risks related to planned supply unbundling and the new market model in Georgia, including counterparty risk associated with a new electricity supplier. It also factors in higher volatility of profitability and smaller size than European peers'.
Rating strengths are Telasi's natural monopoly position in electricity distribution in Tbilisi, with regulated long-term asset-based tariffs set by the independent regulator in Georgia, expected improvement in cash flow visibility after the planned unbundling of supply and low foreign exchange (FX) risks.
"We expect post-refinancing liquidity and credit metrics to be adequate for the rating, but for headroom to reduce following the expiry of the loss-compensation component in 2021-2023 tariffs",-the report reads.
