Energis rating cut to lower junk
STANDARD & Poor's has cut its long-term corporate credit ratings on ailing Energis to lower junk status after the company admitted it could breach banking covenants.
'The downgrade reflects a substantial probability that the group may default on its bond obligations in the short term, given the extremely weak liquidity position at the parent company level,' S&P associate director Leandro de Torres-Zabala said.
S&P noted that following completion of a preliminary strategic review, Energis said it was entering into discussions with its bankers about the expected breach on 31 March of financial covenants on a £725m bank loan to Energis Holding Limited, the holding company of its UK business.
'The bank loan is secured on Energis' best assets, the UK operations,' S&P said.
It added that the company's financial flexibility is 'very limited', noting that its market capitalization has fallen by 82% since 31 Dec, to about £64m, 'and its bonds are trading at distressed levels'.
The ratings remain on CreditWatch with negative implications, the agency said.
THE contents of the London offices of collapsed US energy company Enron were going on view today before they are auctioned next week. Among items on sale are 4,000 computer monitors, 3,000 PCs, the entire telephone system, 50 plasma televisions and a range of executive furniture.
The sale of the £15m contents includes the maple and walnut boardroom table where the company's executives used to meet, top-of-the-range fitness equipment from the in-house gym, and a number of artworks.
