OREANDA-NEWS. May 26, 2010. Southern Telecommunications Company (UTK) [(RTS: KUBN, KUBNP; МICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the largest fixed-line telecommunications operator in the territory of the Southern and North-Caucasian Federal Districts of Russia, hereby announces that rating agency Standard&Poor’s has issued a report in which the long-term credit rating of UTK based on the international scale is confirmed at B with a Stable outlook.

The report points out that UTK holds strong market positions in the traditional telephony segment, the company’s financial performance are improving, while significant cost reduction and improvement of the company’s profitability can be seen.

“After making it through the peak debt repayment period in 2009, the company has managed to improve its loan profile.  UTK holds the potential to generate a positive free cash flow, which should help it also in the future to reduce the proportion of borrowed funds”, the rating agency said in its overview.

The Stable outlook reflects the agency’s expectations that the company will be able to retain its leadership position on the market, and will be able to successfully manage its liquidity moving forward, while maintaining a moderate approach towards investments.