Standard & Poor's does not believe that president of TNK-BP Robert Dudley can manage the company effectively from abroad.
Photo: Andrey Makhonin
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S&P Lowers TNK-BP 1 Pt. amidst Woes
Standard & Poor’s has lowered TNK-BP’s long-term credit rating 1 point, from BB+ to BB with a negative prognosis. The agency mentioned the protracted dispute between shareholders – British BP and Russian AAR (Alfa Group Access Industries and Renova) – as the motivation for their decision. S&P analysts were especially alarmed at the growing unpredictability of TNK-BP’s financial policy and the growing risk of negative court and regulatory decisions in relation to it. The departure of 148 specialists and several key managers also troubled the analysts.
“The current dispute is likely to reduce production in 2009, bearing in mind TNK-BP's highly mature production assets and the need to apply technology to sustain output. Even if shareholders manage to agree on a new management team in the short term, the stability of the current shareholder structure is likely to remain an issue,” those analysts write in a statement by S&P. At the same time, they note the company’s strong financial indicators, stimulated by high oil prices and the profitability of oil refining, and the company’s high level of liquidity.
Moody’s has already reacted to the troubles at TNK-BP by lowering it Baa2 rating from “stable” to “developing.” It noted that the emerging structure of the company, with chief Robert Dudley managing it from afar, is not viable in the long term. The other major international ratings agency, Fitch, has yet to weigh in on the issue. TNK-BP International Ltd. had $8.1 billion in debt at the end of June of this year. TNK-BP stock lost 3.74 percent on the RTS yesterday, against 0.24-percent growth of the index.
www.kommersant.com
All the Article in Russian as of Aug. 07, 2008
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