24 February 2009 20:47 [Source: ICIS news]
TORONTO (ICIS news)--NOVA Chemicals' credit is stronger after Abu Dhabi’s International Petroleum Investment Company's (IPIC) agreed to acquire the Canadian petrochemicals major for $6/share, ratings agency Fitch said on Tuesday.
Fitch placed NOVA on "rating watch positive" status.
IPIC’s planned acquisition of NOVA, if completed, contains several potentially positive credit implications, Fitch said.
First, IPIC had agreed to provide direct credit support to NOVA in the form of a $250m (€198m) credit backstop facility.
In addition, the acquisition of NOVA by a highly rated entity like IPIC would be a credit positive if the acquirer were to formally guarantee NOVA's debt or provide it with other direct or indirect credit support in the future, Fitch said.
“While uncertainties exist as to NOVA's ultimate capital structure following the acquisition, it also seems likely that the acquirer would seek to enhance NOVA's credit quality from its current distressed levels in order to preserve the value of its investment in NOVA,” it added.
Independent of the IPIC takeover, NOVA had also made substantial progress in meeting its $200m financing requirements over the first half of the year, Fitch noted.
NOVA on Monday announced $150m in new financing, which had been supplied by Canadian federal government agency Export Development Corporation of Canada (EDC) and its Canadian banks, Fitch said.
NOVA’s shares were up 3.84% at $5.41 in Tuesday afternoon trading in ?xml:namespace>
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