The Baa2 issuer rating and senior unsecured rating of Danish shipping and oil major Maersk have been placed on review for downgrade, according to Moody’s ratings agency.
Additionally, the company’s senior unsecured medium-term note (MTN) programme’s (P)Baa2 rating was placed on review for downgrade as well.
The rating action follows Maersk’s announcement that it agreed to dispose of its Maersk Oil division to Total S.A. (Aa3 stable) for an enterprise value of USD 7.45 billion. The company is to receive USD 2.5 billion in cash, which will be used to repay debt, and USD 4.95 billion in shares (97.5 million shares representing 3.76% of Total S.A. share capital).
Total S.A. will take over all decommissioning obligations currently amounting to USD 2.9 billion. The divestment is in line with Maersk’s previously announced strategy of separating its energy assets from the Transport and Logistics (T&L) business.
“We have placed Maersk’s ratings on review for downgrade due to significant uncertainty regarding how much, if any, of its outstanding debt it will repay using the value of the Total S.A. shares,” Maria Maslovsky, Moody’s Vice President — Senior Analyst and the lead analyst for Maersk, said.
Moody’s downgraded Maersk’s issuer rating and senior unsecured rating to Baa2 from Baa1 in December 2016.
At the time, the company’s medium-term note (MTN) program rating was also downgraded to (P)Baa2 from (P)Baa1 and all ratings were placed on negative outlook.