TN PETRÓLEO
HOME - ABOUT US - NEWSLETTER - CONTACT US - LINKS
Source: Bnamericas
Date: 06/26/2007 00:00
Neither Brazilian petrochemical firm Braskem (NYSE: BAK) nor petchem and natural gas company Ultrapar (NYSE: UGP) are likely to receive investment grades this year, Standard & Poor`s (S&P) analyst Eduardo Chehab told BNamericas.
Both companies are important players in the domestic petrochemical industry and have received more publicity after their announced US$4bn acquisition of oil refiner and fuels distributor Ipiranga in consortium with federal energy firm Petrobras (NYSE: PBR), according to Chehab.
The ratings agency wants to see first how the conclusion of the acquisition unfolds - a process that could be finalized towards year-end - before it reconsiders the companies` current ratings, Chehab said.
"We want to see how the acquisition of Ipiranga takes place; we are waiting to see the effects of the deal at year-end," the analyst said, adding that although the acquisition would consolidate the companies` operations, the deal means that they are taking on large debts.
As a result of the purchase, Braskem will have US$1.2bn in additional debt, while the savings from synergies are projected at around US$500mn, according to an S&P report.
S&P has maintained stable credit ratings for Braskem (local currency: BB/stable; foreign currency: BB/stable; national scale: brAA/stable) because the company obtained the US$1.2bn in financing at satisfactory rates and its 1Q07 ratios were better than in the first half of 2006, according to the report.
Ultrapar`s ratings are also stable (local currency: BB+/stable; foreign currency: BB+/stable; national scale: brAA+/stable). The company is expected to post US$10.5bn in revenues this year and Ebitda could be US$400mn following the incorporation of Ipiranga`s fuel distribution business.
Nevertheless, the company will see its gross debt increased by US$430mn plus US$250mn in assumed debt as a result of the Ipiranga deal.
Earlier this year, Braskem president José Carlos Grubisich said the company was expecting to obtain investment grade this year. "We are one rung from investment grade," he said at the time.

