International rating agency S&P Global Ratingsapproved the rating of TGC-1 as BBB-/Stable.

The ratings approved stand for high financial results of the company in 2018 and in H1 2019, as well as the agency's expectations that TGC-1 will maintain strong creditworthiness characteristics in 2020–2022.

Experts believe that in the framework of the new phase of the CSA implementation, the company will finance investment projects from operating cash flow, which will not require borrowings since fewer capital investments are planned in the shorter construction period than in the previous investment programme.

It is also noted that the possible payment of higher dividends will not prevent the company from maintaining strong creditworthiness due to the existing reserve within the current rating category.

The outlook Stable reflects S&P Global Ratings' expectations of high creditworthiness against the background of stable operating performance, with the ratio of operating cash flow before changes in working capital/debt being more than 60%. The outlook also implies that TGC-1 is a subsidiary of the Gazprom Group which has moderate strategic significance and that the Company will maintain adequate liquidity and implement reasonable financial policy.

Reference

TGC-1 is a leading producer and supplier of electricity and heat in the North-West of Russia. TGC-1 comprises 53 electric power plants within four constituent entities of the Russian Federation: St. Petersburg, the Republic of Karelia, Leningrad and Murmansk Oblasts.

The installed electric power capacity of TGC-1 is 6.95 GW, heat capacity — 13.65 thousand Gcal/h. Major Shareholders: Gazprom Energoholding LLC (51.79%) and Fortum Power and Heat Oy (29.45%). The total headcount of the Company and its subsidiaries is about 7 thousand employees.