Fitch Changes SIBUR's Outlook to Positive

Moscow, 2 September 2010. Fitch Ratings has changed SIBUR Outlook to positive from stable. Its Long- and Short-term Issuer Default ratings (IDR) have been affirmed at 'BB' and 'B', Respectively.

The Outlook change reflects the resilience of SIBUR business model in combination with timely measures by management to reduce costs and safeguard liquidity operating performance.

The Positive Outlook also reflects Fitch’s expectation that further expanding SIBUR’s APG processing capacity and tripling polypropylene production capacity by end-2012 will result in stronger underlying profitability for SIBUR in the medium-term.

Successful execution of the capex programme over the next 18–24 months while maintaining moderate financial leverage and an adequate liquidity position could result in a rating upgrade.

The ratings also incorporate the supply-driven downturn in the chemicals cycle, characterised by significant capacity coming on stream in the Middle East and Asia.