NOVA says it has $575m liquidity, responds to reports

21 January 2009 23:51  [Source: ICIS news]

HOUSTON (ICIS news)--Responding to news articles questioning its financial health, NOVA Chemicals said on Wednesday it had $575m (€449m) in available liquidity and full access to its credit facilities.

NOVA shares plunged on Wednesday after The Globe and Mail newspaper of Toronto reported that investors were concerned that the Canada-based company could become a casualty of the global credit crises.

NOVA’s $250m of bonds, which will mature in April, were trading at very low levels, according to the newspaper, and investors “are jittery about repayment, even though NOVA says it has the money”.

“In a clear signal of fear, the bonds now yield a whopping 123% after they slumped yesterday to about 82 cents on the dollar from 88 cents Monday,” the newspaper reported.

Shares of the company on the New York Stock Exchange fell by $1.21 to $3.54.

NOVA responded to the reports with a written press statement.

“Although we would find purchase of our $250m bonds due April 1, 2009, attractive at current prices, consistent with our insider trading policy we do not intend to consider purchasing any bonds until next week’s release of our fourth-quarter 2008 results,” the company said.

The plastics producer will release its fourth-quarter earnings report on 29 January.

The company said it had $575m in available liquidity as of 31 December.

Moody’s Investors Service analyst John Rogers told ICIS news on Tuesday that NOVA’s debt securities were trading at “absurd levels” but added the company would likely get support from the Canadian banks.

($1 = €0.78)

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Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy


By: Brian Ford
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