Moody's changes Air Liquide outlook to negative

18 April 2007 17:44  [Source: ICIS news]

LONDON (ICIS news)--Moody’s Investors Service changed its outlook on Air Liquide from stable to negative on Wednesday following the industrial gases group’s agreement to buy Lurgi from GEA.

The Paris-based company said on Monday it had agreed to buy plant engineering group Lurgi for €550m ($743.2m) to strengthen its own engineering resources and technology base.

Moody’s said that while it believed the acquisition would have a positive effect in the medium term, it would increase Air Liquide’s gross debt by €240m and dilute financial metrics in the short term, given Lurgi’s weak operating performance.

Air Liquide had taken on an additional gross debt of €1.2bn since December 2006 following acquisitions from Linde and the GEA agreement.

The company’s debt-to-equity target had changed from 50% to 60-70%, Moody's added, triggering some downward pressure on Air Liquide’s Prime-1 ratings.

The agency's last rating action on Air Liquide was on 31 March 2004 following the French group’s acquisition of certain activities of Messer Griesheim.

By: Nigel Davis
+44 20 8652 3214

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