Standards and Poor's placed the BB- long-term corporate credit rating of Russian uncut diamond major Alrosa on Rating Watch list with a Negative outlook. The agency is concerned whether the company will be able to refinance its banking debt. Alrosa was expected to use the proceeds of selling its gas extraction assets to Russia's largest company Rosneft to refinance the debt, but it was recently reported that the deal could be revised or called off.
Previously head of Fitch Ratings' raw materials team Peter Archibald told Bloomberg that the agency is going to revise the ratings of Alrosa should the deal on selling its gas assets to Rosneft fail. After the deal with Rosneft was announced in July 2013, Fitch Ratings placed the BB- long-term foreign currency rating and BB- short-term rating of the company on Rating Watch Positive (RWP). In October 2013, Fitch upped the rating to BB/Stable.
Previously, in February, head of Russia's largest oil company Kremlin-controlled Rosneft Igor Sechin told the press that the price of buying Alrosa's gas extraction assets could be corrected. Prime reported that according to Alrosa's IPO presentation, should the deal fail it will have difficulties in refinancing debt and is unlikely to find other buyers for the assets fast.
In 2013, Rosneft continued its expansion in the natural gas market with finalizing the previously announced acquisition of USD 1.38bn worth of gas assets from Alrosa. The Federal Antimonopoly Service (FAS) approved the sale of 100% stakes in GeoTransGaz and Urengoy Gas Company controlled by Alrosa.