Hungarian fertilizer maker Nitrogenmuvek Zrt’s Chief Strategy Officer Zoltan Bige, in a statement on the company’s website, expects strong fundamentals and improving demand to help boost its outlook after Fitch downgraded the company’s long-term issuer credit rating.
Bige, son of owner and Chairman Laszlo Bige, noted that refinancing preparations indicate a prudent financial approach (GM Dec. 1, p. 27). Bige said production can be restarted immediately once market conditions are met. “Our investors understand our situation and find our liquidity reassuring,” he told Bloomberg.
Fitch cut the company’s rating to CCC+ from B- and placed all ratings on Rating Watch Negative to reflect disruptions in operation and “material deterioration” in financial performance in 2023, leading to higher refinancing risk for outstanding bonds. Adverse effects have heightened refinancing risk of its €200m Eurobond maturing in May 2025.
Fitch said the company underperformed over the past 12 months versus expectations due to a fertilizer market downturn and as gas prices rose above long-term averages. On top of that, the government’s tax on CO2 emissions applied retroactively and has led to a production halt, which will “materially” affect profitability and competitiveness.
While Nitrogenmuvek is challenging the tax, Fitch expects the case is unlikely to be resolved before the bond’s maturity.