1. English Edition

BP Unlikely To Have To Sell Assets To Fund Spill-Fitch

BP Unlikely To Have To Sell Assets To Fund Spill-Fitch
dj
Τετ, 16 Ιουνίου 2010 - 18:49
BP PLC (BP) is unlikely to have to sell assets to pay the costs of its oil spill in the Gulf of Mexico and the company will probably not be broken up as a consequence of the environmental disaster, said representatives of Fitch Ratings Wednesday.
BP PLC (BP) is unlikely to have to sell assets to pay the costs of its oil spill in the Gulf of Mexico and the company will probably not be broken up as a consequence of the environmental disaster, said representatives of Fitch Ratings Wednesday.

"We expect BP to make it through the challenge of this," without being broken up, said Richard Hunter, Fitch's Head of Europe, Middle East , Africa and Asia Pacific Corporate Finance in a conference call.

Fitch estimates BP's liability for containment, cleanup and compensation resulting from the oil spill will be around $6 billion, said Jeffrey Woodruff, Senior Director in Fitch's Europe , Middle East and Africa Energy team. Civil penalties for the spill could be between $2 billion and $8 billion, he said. BP could fund these costs without needing to sell assets, he said.

Fitch downgraded BP long-term debt six notches to just above junk level Tuesday on fears that the U.S. government would force it to pay billions of dollars up front into an escrow account to pay spill cleanup and compensation.

If BP's Chairman Carl-Henric Svanberg and U.S. President Barack Obama produce a sensible mechanism for settlement of compensation claims resulting from the spill, rather than the demand for up front payment of $20 billion into escrow that came from Senate Democrats this week, the outlook for BP's rating could improve, said Hunter.

The cost of insuring BP debt surged Wednesday, putting premiums for BP credit default swaps firmly into junk territory, according to CMA DataVision. Credit default swaps are not a factor in Fitch's ratings and the recent increase in their cost for BP looks "overdone", said Woodruff.
Ακολουθήστε το energia.gr στο Google News!Παρακολουθήστε τις εξελίξεις με την υπογραφη εγκυρότητας του energia.gr

Διαβάστε ακόμα