Fitch downgraded long-term foreign currency rating of FESCO

FESCOThe international rating agency Fitch downgraded the long-term foreign currency Issuer Default Rating of Russian carrier FESCO due to the weak liquidity and continuing deterioration of the operating performance. The company’s rating was downgraded from “B-” to “CC” mostly because of the finance and liquidity problems of the group, as well as weak cash flows and volatility of the ruble. The Russian shipping company suffers from the delay in world economy and overcapacity of the container shipping market. FESCO reduced its planned investments in response to a tough market, but failed to reach stable liquidity and to improve the balance sheet.

“Fitch Ratings has downgraded Russia-based Far-Eastern Shipping Company Plc’s (FESCO) Long-term foreign currency Issuer Default Rating (IDR) to ‘CC’ from ‘B-‘. Fitch has also downgraded FESCO’s foreign currency senior unsecured rating to ‘C’ from ‘B-‘ on weak recovery prospects”, says the official statement of Fitch. “The downgrade reflects FESCO’s weak liquidity, continued deterioration of operational performance, weaker cash generation, and exposure to a contracting economy and rouble exchange rate volatility. We expect the company’s financial performance to have deteriorated in 2015 and that an improvement in 2016 is uncertain”, adds the statement.

Transport Group FESCO is one of the largest private transport and logistics companies in Russia with assets in the area of ​​the port, rail and integrated logistics business. A diversified portfolio of assets FESCO allows cargo delivery “from door to door” and control all stages of the intermodal transport chain.