S&P: Maersk on negative watch for deal with Total

Wednesday, 23. August 2017 15:13

The Danish shipping and energy powerhouse's agreement to sell fossil fuel exploration and production assets in the North Sea to France's Total SA triggered a warning at credit appraisers. The BBB long-term corporate credit grade of A.P. Møller – Mærsk A/S, or Maersk Group, was placed on credit watch with negative implications, S&P Global Ratings said on Wednesday. The agency cited uncertainty about whether potential deleveraging could fully offset the loss of benefits.

If the major indicators fail to make up for the impact of the divestment, the rating may be slashed as one notch was attributed to diversification, analysts noted. However, they added proceeds would reduce debt and add the investor's highly liquid shares. Maersk Olie og Gas A/S (Maersk Oil) has contributed $2.6 billion or 38% of consolidated earnings before interest, taxes, depreciation and amortization last year, the ratings firm says. 

"In addition, Maersk stated that its decommissioning liability will reduce by $2.9 billion, which could further support an improvement in credit metrics. We understand that management has yet to decide how to allocate the funds between these two options and that the final decision will depend largely on the completion of other separations," researchers stated and added the status will be reassessed within three months.

Related Links: A.P. Moeller-Maersk A.S.Total SE
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