Standard & Poor’s Ratings Services reduced the corporate credit rating and long-term senior unsecured debt rating on Pakistan Mobile Communications (Mobilink) to ‘CCC+’ placing Mobilink in the ‘Substantial risks’ category. Mobilink’s previous rating of ‘B-’ was described ‘Highly Speculative’.
S&P predicts that Mobilink will to continue to have weak liquidity, with refinancing risk, over the next one year. They also expect the company’s covenants, for the period ended June 2010, to come under pressure due to an absence of support from its parent company, Orascom Telecom. In the past, Orascom Telecom Mobilink has given great support to Mobilink in the form of equity infusion and the waiver of management fees. However, Orascom Telecom’s compromised liquidity position means that it may no longer be offering such support to Mobilink in the immediate future.
Mobilink is a 100% privately owned company by Orascom Telecom and is also Orascom Telecom’s second-largest operation.