The ratings agency Standard & Poor’s has downgraded the Kuwaiti Projects Co. (KIPCO), the owner of the Orbit-Showtime satellite TV platform, twice in quick succession.
Standard & Poor’s lowered its long-term credit rating for KIPCO from BBB+ to BBB, and…
The ratings agency Standard & Poor’s has downgraded the Kuwaiti Projects Co. (KIPCO), the owner of the Orbit-Showtime satellite TV platform, twice in quick succession.
Standard & Poor’s lowered its long-term credit rating for KIPCO from BBB+ to BBB, and down again to BBB- at the end of March. Its short-term credit rating was lowered from A-3 to A-2.
The agency stated that the company’s financial risk profile has been weakened through its depositing of a significant share of its bank balance in its banking subsidiaries.
The other main concern for Standard & Poor’s is that KIPCO’s investment portfolio is dominated by its majority holding in Orbit Showtime and its other main asset, United Gulf Bank. The two represent 62% of the portfolio’s adjusted value.
Standard & Poor’s considers these two entities to have relatively weak credit characteristic, and that the concentration of these holdings “weighs heavily” on KIPCO’s portfolio risk profile.
The agency has maintained a stable outlook for KIPCO, in light of its investment discipline and the belief that its majority owner, the Kuwaiti royal family-affiliated Al Futtooh Holding, will support the group through any period of financial stress.
Orbit Showtime was formed through the merger of the MENA region’s two major pay-TV operators last July.
