Fitch Dwngrs FertiNitro Finance to 'CC', Maintains Rtg Watch Neg.Business Editors CHICAGO--(BUSINESS WIRE)--Jan. 16, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has lowered the debt rating of FertiNitro Finance Inc.'s (FertiNitro) US$250 million 8.29% secured bonds due 2020 to 'CC' from 'CCC'. The rating remains on Rating Watch Negative. Without a definitive source of external liquidity, Fitch believes that default on the FertiNitro bonds is probable in the near term. The rating downgrade reflects the higher degree of uncertainty in FertiNitro's ability to fully cover its upcoming US$44 million debt service payment in April. Since late last year, FertiNitro has been in discussions with its lenders and sponsors on alternatives to address the project's worsening financial situation, which has greatly diminished the project's liquidity. In addition, the ongoing national strike in Venezuela that has significantly curtailed PDVSA's operations has further eroded FertiNitro's cash balances. FertiNitro relies on PDVSA PDVSA Petroleos De Venezuela, SA for its gas feedstock feed·stock n. Raw material required for an industrial process. Noun 1. feedstock - the raw material that is required for some industrial process raw material, staple - material suitable for manufacture or use or finishing . Due to the prolonged national strike, FertiNitro has been shutdown since mid-December. As previously mentioned in the Fitch press release dated November 12, 2002, FertiNitro requires external liquidity to cover its scheduled debt payment, capital expenditures related to critical repairs, and the costs associated with an extended outage out·age n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. for the repairs. Furthermore, due to unsuccessful negotiations between FertiNitro and the EPC (1) (Entertainment PC) See HTPC. (2) (Electronic Product Code) A standard code for RFID tags administered by EPCglobal Inc. (www.epcglobalinc.org). Contractor on the warranty-related costs, the situation has proceeded to arbitration. Since November, both the sponsors and lenders have been evaluating FertiNitro's situation. Fitch believes external financial support from the sponsors combined with relief from lenders to be critical in addressing FertiNitro's distressed liquidity position. FertiNitro is owned 35% by a Koch Industries Koch Industries, Inc. (pronounced "koke") is a private corporation based in Wichita, Kansas. According to Forbes Magazine, it is the largest privately owned company in the world by revenue (surpassing Cargill in 2005 with the acquisition of Georgia-Pacific), with subsidiaries , Inc. subsidiary, 35% by Petroquimica de Venezuela, S.A. (Pequiven), a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Petroleos de Venezuela S.A. (PDVSA), 20% by a Snamprogetti S.p.A. subsidiary, and 10% by a Cerveceria Polar, C.A. (Polar) subsidiary. |
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