Elektrim shares tumble on news of possible credit rating cut

Telecom and energy concern Elektrim is experiencing one of the most difficult times in its history. On Friday its shares fell to their lowest level since November 1999 after the title’s per-share value tumbled 9% from Thursday closing at zl.29.40. According to analysts, the surge in investor profit-taking was the result of a decision made by international credit rating agency Moody’s on Thursday to investigate the firm’s ability to finance its short-term business activities, with the possible outcome of lowering its credit rating. Moody’s cited recent ownership squabbles between the company’s main shareholders, Vivendi and Deutsche Telekom, and a delay in signing a $180 million contract between Elektrim and Deutsche Telekom as the main reasons for its decision. Separately, Elektrim spokeswoman Ewa Bojar confirmed the company's plans of dividing the Elektrim holding into two separate entities, whereby one would deal with the energy sector, while the another with telecommunications. She emphasized, however, that everything depends on negotiations with investors and the positions Elektrim's partners take. Analysts say that the newly structured company in theory would be beneficial but difficult to realize. (Prawo i Gospodarka, p.12) A.D.