Mubasher: Fitch Ratings has placed Kuwait Energy plc’s Long-Term issuer default rating (IDR) of 'CCC' on rating watch evolving (RWE).

The decision came after Hong Kong-listed United Energy Group Ltd’s had announced plans to acquire the Kuwaiti company, the New York-based ratings agency said in a statement.

The rating was also affected by the company’s immediate low liquidity position, Fitch added.

“The RWE is predicated on the short-term liquidity risk should the deal fail to complete without alternative sources of funding in place to repay Kuwait Energy's USD250 million notes,” the ratings agency noted.

As a result, the ratings could be further downgraded to reflect the heightened probability of default as the August 2019 bond maturity approaches. 

Fitch further added that the completion of the proposed acquisition addressing Kuwait Energy's immediate liquidity concerns would likely result in positive rating action.

Fitch said that it would review the ratings upon completion of the transaction or if Kuwait Energy's liquidity significantly deteriorates.