Bulletin: Danish Offshore Wind Giant DONG Energy's Plan To Sell Upstream Business To Ineos Is Credit Positive; No Rating Impact

PARIS (S&P Global Ratings) May 24, 2017--S&P Global Ratings said today that its ratings and outlook on Denmark-based offshore wind project developer DONG Energy A/S (BBB+/Stable/A-2) are unaffected by the company's announcement that it will divest all its shares in its upstream oil and gas business to the Ineos group for an unconditional cash payment of $1,050 million (Danish krone [DKK] 7.0 billion), including vendor loan notes of $250 million (DKK1.7 billion) amortizing from 2018 to 2020. We expect the transaction to close in the third quarter of 2017 and to result in a nontaxable capital gain for DONG Energy of DKK2.5 billion. We see the transaction as credit positive given the oil and gas segment's inherently higher risk and

...PARIS (S&P Global Ratings) May 24, 2017--S&P Global Ratings said today that its ratings and outlook on Denmark-based offshore wind project developer DONG Energy A/S (###+/Stable/A-2) are unaffected by the company's announcement that it will divest all its shares in its upstream oil and gas business to the Ineos group for an unconditional cash payment of $1,050 million (Danish krone [DKK] 7.0 billion), including vendor loan notes of $250 million (DKK1.7 billion) amortizing from 2018 to 2020. We expect the transaction to close in the third quarter of 2017 and to result in a nontaxable capital gain for DONG Energy of DKK2.5 billion. We see the transaction as credit positive given the oil and gas segment's inherently higher risk and volatility, as well as poor performance in the recent past, including a DKK14.8 billion (about 2.0 billion) impairment due to low commodity prices, announced in February 2016. That said, our ratings on DONG Energy already qualitatively factored in the disposal of...

Bulletin