Moody's places Cyfrowy Polsat's ratings on review for downgrade

19 Nov 2013
The Management Board of Cyfrowy Polsat S.A. ("Cyfrowy Polsat", the "Company") informs that Moody's has today placed the ratings of Cyfrowy Polsat; corporate family rating (CFR) at Ba2, probability of default rating (PDR) at Ba2-PD and the Ba2 ratings of the senior secured notes due 2018 (issued by Cyfrowy Polsat Finance AB, a wholly owned Swedish subsidiary of Cyfrowy Polsat) under review for downgrade. The rating action follows the announcement that Cyfrowy Polsat has entered into a conditional investment agreement to essentially acquire at least 83.8% of Metelem Holding Company Limited, which owns 100% of Polish mobile operator Polkomtel Sp. z o.o.
While the consideration for the acquisition of Polkomtel's equity is planned to be made entirely through the transfer of shares, Cyfrowy Polsat's consolidated leverage will be negatively affected as Polkomtel's leverage is materially higher.
The review will evaluate the weakening of the Company's leverage against the transaction's potential benefits for the Company's business profile including (i) further diversification away from cyclical advertising revenues, (ii) increased scale and (iii) product-suite expansion.
Moody's currently does not expect a downgrade of Cyfrowy Polsat's CFR to exceed one notch, provided the transaction is concluded as presented.
According to Moody's, the review process will likely conclude when the first step of the acquisition closes, after Cyfrowy Polsat's debt refinancing and the repayment of the outstanding Polkomtel's PIK notes (both are scheduled to take place by May 2014).
The securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
Legal grounds: Article 56 Section 1 item 2 the Offering Act in connection with § 5 Section 1 item 26 of the Ordinance of the Minister of Finance of February 19, 2009 regarding current and periodic information to be submitted by issuers of securities and terms of acknowledging the equivalence of information required under the laws of non-member states.
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Last updated 10/05/2014