Published: Monday July 2, 2012 MYT 6:08:00 PM
Fitch: Petronas to benefit from RM17.1b Progress Energy acquisition
It said on Monday the acquisition for C$5.5bil (RM17.12bil) would enable Petronas to benefit from an increase in geographical diversification across natural gas assets in Canada.
"Progress Energy is reported to have 1.9 trillion cubic feet equivalent of proved and probable gas reserves. Petronas will seek to monetise these reserves through export of liquefied natural gas (LNG) to the higher-priced Asian markets," it said.
Fitch said Petronas and Progress Energy had selected a site at Price Rupert in British Columbia for a potential liquefied natural gas export terminal and would conduct feasibility studies for this facility.
"It is possible that Petronas may seek partners for the development stage," it said.
Fitch Ratings said Petronas (A'/Stable) proposed acquisition would not have an immediate impact on its ratings.
It pointed out Petronas' rating had adequate headroom, including its solid net cash position, for acquisitions of this size.
Petronas is rated long-term foreign and local currency issuer default (IDR) A' with stable outlook and short-term foreign currency IDR F1'.
Under the deal, Petronas would pay about C$5.5bil for 100% of Progress Energy and its outstanding convertible debentures.
The transaction is expected to close by end-September 2012, subject to government and other relevant approvals. The proposed acquisition would be funded by cash on hand.
As at Dec 31, 2011, Petronas reported net cash and marketable securities of RM161bil.