Mumtalakat 'rating won't be affected'
Manama, October 28, 2010
Fitch Ratings says it is unlikely that there will be a rating impact on Bahrain Mumtalakat Holding Company from the Bahrain government's plan to inject more than $1 billion into its 100 per cent subsidiary Gulf Air.
Fitch continues to expect that the capital injection and any additional material financial support to Gulf Air will be assumed directly by the government via Mumtalakat.
Fitch notes that Gulf Air's historical operating losses were a major financial burden on Mumtalakat, given the latter's material liquidity assistance thus far to the airline, of approximately $450 million in 2008 and $525 million in 2009.
Gulf Air did not indicate when and how the additional funds would be provided. Nevertheless, if Mumtalakat was to raise substantial debt on behalf of its subsidiaries or further guarantee subsidiaries' debt, it would be considered as a negative credit factor.
On June 1, Fitch assigned Mumtalakat a Long-term Issuer Default Rating of A with a stable outlook.
The viability of Mumtalakat's business model is dependent on continued strong linkages with the sovereign, its strategic importance as a holding company for the government's non oil and gas assets, and its low level of leverage relative to Bahrain's A rating.-TradeArabia News Service
More Finance & Capital Market Stories
- NBAD approves 40pc cash dividends
- NBAD sees 8-10pc loan growth
- Al Basel Group launches investment arm
- Union Insurance posts $18m profit
- Oman warns banks on conflicts of interest
- Japan to lend Tunisia $480m
- 400 to join anti-laundering seminar in Riyadh
- Lebanese insurer to head Prague Club
- UAE's first REIT plans $135m IPO
- Bahrain banking industry outlook 'positive'
- New India Assurance opens Bahrain branch
- Qatar sets up mixed business incubator
- Kuwait budget spending up 8pc in April-Jan
- Thomson Reuters to host Mena IFR awards
- ADIB offers smartphone industry investment
- Gulf Finance House to start $3bn Tunisia project
- KFH completes ICT project upgrade
- Egypt urban annual inflation slows to 9.8pc
- BIBF signs deal with Palestinian institute
- Bahrain’s GDP set to expand 12pc
- KFH-Bahrain rebrands priority banking
- Bank Nizwa wins top Islamic bank award
- Qatar labour costs may jump: IMF
- Kuwait Q3 trade surplus hits $23bn
- Dubai trade growth up 7.6pc to $362bn
- Deloitte appoints new managing director
- Al Ramz tops UAE trading in Feb
- IFC in $150m loan deal with Bank Audi
- SME funding focus for Abu Dhabi forum
- Insurance House posts second year of profit