Doha – Mubasher: S&P Global Ratings has put Qatari telecom company Ooredoo on CreditWatch "Negative".
This follows the global ratings agency’s cut to the Gulf country’s sovereign credit rating and downgraded its long-term debt rating to "AA-" from "AA" last week, marking the first downgrade for the country’s debt since the diplomatic rift between Qatar and Saudi Arabia, Egypt, the UAE, and other countries took place last week.
S&P Global placed Qatari telecom operator Ooredoo, which operates in Qatar and 11 other countries, on notice for a possible rating cut of its own.
"Ooredoo’s domestic operations, which account for [25% to 30%] of [the] group’s revenues and EBITDA [earnings before interest, tax, depreciation, and amortisation], will likely suffer from the departure of residents of the countries severing ties with Qatar that were working in Qatar," S&P said in a note published late Monday.
"The UAE, Saudi Arabia, and Bahrain have given their nationals 14 days to leave Qatar, which may result in lower roaming revenues," the ratings agency said in a report.
The ratings agency further said that the Qatari operator’s Maldives-based subsidiary may suffer after the country cut its diplomatic ties with Qatar last week; however, it noted that the Maldives subsidiary only contributes around 1% to 2% of Ooredoo’s revenue and EBITDA.
We do not expect the impact to be material enough to hit the operator’s credit profile; however, these ratings may be further downgraded if Qatar’s sovereign rating is cut further.
"From Ooredoo’s perspective there is, presumably at least, some relief that the countries in the [Arabian] Gulf and wider Middle East in which it has significant international operations – Kuwait, Oman, Iraq, Algeria, and Tunisia – have not so far joined the action against Qatar," The National reported, citing analyst Matthew Reed from the consultancy Ovum as saying.
"If any of them were to do so that would no doubt create operational difficulties for Ooredoo," he added.
