Moody's may lower Asia's Continental Chemical

08 October 2008 17:57  [Source: ICIS news]

HOUSTON (ICIS news)--Moody's Investors Service might lower its B1 rating on Singapore-based Continental Chemical due to concerns about the company’s ability to meet its financial obligations in the next 12 months, the ratings agency said on Wednesday.

The action also reflects challenging operating conditions, including heightened working capital requirements and delays in the commissioning of its new phthalic anhydride (PA) plant in China, Moody’s said in a statement.

A high degree of volatility in Continental’s PA and DOP operations and weaker biodiesel fundamentals have also impacted profitability in 2008, according to Moody’s.

"These challenges have constrained Continental's financial flexibility…particularly if there is further delay in commissioning the China plant ", the ratings agency said.

The review will focus on progress for the commissioning of the China plant and its contribution to Continental’s cash flow in 2009, Moody’s said.

Continental Chemical produces intermediate chemicals, including diocty phthalate (DOP) and PA, specialty resin products and biofuel.

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By: William Lemos
+1 713 525 2653

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