S&P downgrades Petroplus rating to CCC+

29th December 2011, Comments 0 comments

Credit ratings agency Standard and Poor's on Thursday downgraded its rating for Swiss oil refiner Petroplus to CCC+ after banks froze $1 billion (765,000 euros) in credit lines it needs to operate.

The firm, which previously held a B rating, may not be able to make payments to continue operating, S&P's said in a statement explaining the downgrade, which it said reflected the "sharp deterioration in the company's liquidity position."

The CCC+ rating is given to companies vulnerable to default.

Petroplus, Europe's largest independent oil refiner, said on Tuesday that lenders had frozen about $1 billion in uncommitted credit lines, threatening its ability to purchase crude.

The firm, which operates five refineries, said the credit lines are "critical" to allow its operating units to meet their obligations when due.

Petroplus did not disclose the reason for the freeze but the action comes against the backdrop of the eurozone crisis and banks tightening lending conditions.

© 2011 AFP

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