Enemalta would struggle to generate positive cash flow with lower tariffs - S&P

Enemalta will continue to make a loss until 2016 and this will weigh further on the company's already very weak debt structure and debt coverage metrics, Standard & Poor said in a report on the corporation. The rating agency rated Enemalta at B+/Negative and said it projected negative funds from operations in 2013-2014 with a return to positive territory only in 2015. “Enemalta should start deriving benefits from procuring some of Malta's electricity needs from Italy in 2015, through the planned submarine cable that will connect Malta to Sicily, at a much lower cost than local generation costs. S&P said it could downgrade Enemalta if it thought that Enemalta would struggle to generate positive cash flow before working capital in 2015. This could occur if the benefits of the submarine link did not materialise as planned, if electricity tariffs were reduced as a means to support the local economy, or if the government decided to no longer fund part of Enemalta's costs through the national budget. On the other hand, it said it could revise the outlook to stable if it thought Enemalta could improve its currently tight liquidity position while achieving cash flow break even earlier...