14 December 2007 18:15 [Source: ICIS news]
HOUSTON (ICIS news)--Moody's rating agency on Friday affirmed a negative credit outlook for US-based chemical producer Dow Chemical following the announcement of plans to enter into another commodity petrochemical joint venture.
The agency noted a “substantial credit positive” from the influx of $9.5bn (€6.8bn-10.2bn) in exchange for the transfer of assets to the JV from its partner Petrochemicals Industry Co (PIC), a subsidiary of state-run Kuwait Petroleum Corp. However, Dow’s plan to pursue transformative acquisitions by the end of 2008 could cost $10bn-15bn, Moody’s said.
“The magnitude of such a potential transaction or transactions, as well as the time required complete the joint venture and receive cash, does not support a stable ratings outlook at the current time,” Moody’s said in a bulletin.
In the long term, Moody’s said the transaction with PIC would provide substantial value and increase growth in ?xml:namespace>
"This venture should enable Dow to grow its commodity chemical and polymer market presence in
Dow and PIC on Thursday announced the JV to take advantage of the
($1.00 = €0.68)
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