International ratings agency Fitch Ratings has revised Omani power distribution and supply utility Mazoon Electricity Company SAOC’s Outlook to Stable from Negative, while affirming the company’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB-’. The action follows a recent similar action on the Sultanate of Oman’s Outlook.
Mazoon Electricity Company SAOC (MZEC), a subsidiary of Nama Group, undertakes regulated distribution and supply of electricity in Al Dakhiliyah, South Al Sharqiyah, North Al Sharqiyah, South Al Batinah governorates as well as Al Suwaiq in North Al Batinah governorate under a licence issued by the Authority of Public Services Regulation.
“Mazoon’s ratings are constrained by the sovereign ratings, reflecting our view of their strong links. The company’s credit profile reflects Mazoon’s stable profitability, with a significant share of EBITDA from regulated electricity distribution, as well as expected negative free cash flow (FCF) over the next four years, due to significant capex and higher dividends. We forecast metrics to remain commensurate with the ratings,’’, said Fitch in its outlook statement.
Last week, Oman Investment Authority (OIA) — the parent organisation of Nama Group — announcing the start of a landmark restructuring exercise that will culminate in the merger of merger of four electricity distribution and supply utilities: Muscat Electricity Distribution Company, Mazoon Electricity Company, Majan Electricity Company and Rural Areas Electricity Company (Tanweer).
The move is designed to optimise efficiency and eliminate duplication and waste in this key sector.
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