Fitch Ratings has affirmed Tunisia-based phosphate mining company Compagnie des Phosphates de Gafsa’s (CPG) and chemical company Groupe Chimique Tunisien’s (GCT) National Long-term ratings at ‘A+(tun)’ and their National Short-term ratings at ‘F1(tun)’. The Outlook is Negative.
CPG’s and GCT’s ratings reflect potential support from the Tunisian government (BB-/Negative), given the state’s full ownership of both companies, and the strategic importance of the phosphate industry to the state.
The Negative Outlook reflects the weakening of Tunisian sovereign rating and of its implied capacity to provide timely support to CPG and GCT.
This coincides with a weakening of the fertiliser sector outlook in Tunisia, with low phosphate stocks constraining sales amid a substantial increase in capital expenditure (capex) and sustained cash dividends. Fitch expects reduced liquidity and higher debt in 2014 and 2015.