October 23, 2021

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Shares for Skatek after debt default in Ukraine – E24

Renewable company Oslo stock market plummeted after the release of first quarter figures. Analysts believe that the report violating credit conditions in Ukraine is frightening the market.

Stock market crash: Skatech stock is still highly traded on the Oslo Stock Exchange to this day, where it has been falling sharply.

Skatech

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– The market considers this gap very negative and sends more than 10 per cent of the share, but Skatek believes it is relatively inconsistent for its share, says Evind Carwick, an analyst at Carnegie, to DTN Direct.

Skatech shares are up nearly 11 percent after the renewable company released its first-quarter results for this year on Friday morning.

The stock recovered somewhat after falling to a high of 17 percent.

Points for credit default

According to analysts at both Carnegie and ABG Chundal Collier, the quarterly report said Skatech was violating credit terms in Ukraine.

Skatech reports that by the end of March many projects in Ukraine had not met “certain loan conditions”.

Skatech entered the country in 2017 and is developing a significant portfolio of solar projects. However, according to Barreto Securities, a difficult situation has arisen since last summer when Ukrainian authorities announced a reduction in tariffs.

Skatech is a global player in a large range of hydro power, solar, wind and battery solutions.

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Skatech writes in a statement that there have been calls for changes to the power purchase agreement. Because it is not approved by lenders, it is defined as a breach of loan terms.

The company further writes that it is in talks with lenders to resolve the situation and has not stated any intention to join the loans.

Trust the solution

According to Carnegie’s analyst, Skatek will now work with development banks and the Ukrainian government to work out a solution.

The analyst believes that this solution will often partially postpone the schedule of repayment of outstanding loans to Skatek in Ukraine.

– I choose to believe what the administration says in this particular “case”. Property in Ukraine today operates at new rates and earns money. Karvik says this is therefore a matter of policy for Skatek, and that the reduction of tariffs is a crime committed by the Ukrainian government.

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The analyst emphasizes that Ukraine is not one of the largest markets for Skatek’s business. What Carwick fears may happen in the wake of this scenario, however, could have spillover effects on other markets.

– If something similar happens, for example, in South Africa or other markets, it will have a much bigger impact. But from my experience after conversations with management, the analyst says there is no indication that this will happen and management has no indication of this, but insists there is a risk.

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