TEXT-Moody's places Renova's Ba2 corporate family rating

(The following statement was released by the rating agency)

Dec 22 - Moody's Investors Service has today placed the corporate family rating of Renova Holding Ltd ("Renova" or the "Company") under review for downgrade.

The rating action is in response to a combination of factors including: (i) the increase during 2008 in the investment company's leverage as a result of new debt incurred to finance the acquisitions of majority stakes in two European engineering companies as well as majority stakes in a number of electricity generation and natural gas distribution companies in Russia; (ii) an overall decline in the group's credit profile as measured by one important metric used in the methodology in assigning the rating reflected by a deterioration in market value based leverage - which is now estimated to approach 25% on a Total Debt/Market Value of Assets basis - due to the recent decline in the market valuations of many of its key investment holdings, while Moody's notes that the company maintained substantial cash balances, as well as (iii) uncertainty over the extent to which shareholder distributions or proceeds from divestments from these various investments holdings will be negatively impacted during 2009 by the more challenging overall economic environment. The review is therefore assessing the likely trend in cash flow available to service debt over the near term - particularly in terms of cash dividend receipts - due to the above factors, as well as the impact of the Company's financing arrangements on the group's liquidity and financial flexibility. The review will also be assessing the steps that management will be taking from a financial policy perspective in response to these changes in circumstances over the near-to-medium term.

Moody's previous rating action on Renova was on the 7th November 2007 when the Ba2 corporate family rating was originally assigned with a stable outlook. For the assignment of the ratings, Moody's has used its Global Investment Holding Companies methodology published in October 2007 which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Credit Policy & Methodologies directory.

Renova Holding Ltd is a Bahamas-based investment holding company with principal investments in TNK-BP, UC RUSAL, a number of Russian power generation and distribution companies, as well as chemical, machinery, telecoms and media and real estate companies in Russia and Europe. At the end of the first half of 2008, the fair value of its portfolio was estimated at USD 19.3 billion, with the core investments concentrated in Russia.