Qatar’s Ezdan Holding said Friday it would have funding to repay sukuk maturing available in May this year and April 2022.
Citing reducing liquidity and higher risk of default, credit rating agency S&P Global downgraded Thursday Qatar’s Ezdan’s long-term credit rating to CCC from B-.
“The cash and bank balances, cash flows from operations, and the credit lines available to Ezdan will be sufficient to repay Sukuk maturing in May 2021 and April 2022,” the company said in an email to Reuters.
Qatar’s Ezdan said it was finalising a loan facility agreement with a major bank for repayment of $500 million worth of sukuk maturing in May.
The company said it plans to repay sukuk due in 2022 mainly through operating cash flow expected to be generated during the next 12 months, as well as available cash and bank balances.
“The group is implementing a strategic plan which is closely monitored on a regular basis, with targets that will lead to a significant increase in the net cash flow from operation,” the company told Reuters.
S&P report had warned of a high near-term refinancing risk as Ezdan is still in negotiations to secure a new credit line.
The maturity date of its $500 million premium unsecured sukuk falls on May 18, 2020.
The Agency lowered Ezdan’s sukuk rating to CCC- from CCC+and removed it from CreditWatch, where it was placed in May 2020.
S&P expected Qatar’s Ezdan operating performance to improve slightly in 2021-2022, but not enough to materially reduce the very high leverage.
Companies around the world are suffering from insolvency in paying their debts, due to COVID-19 repercussions which affected companies’ liquidity, annual profits and expected revenues.