S&P Comments on Effect of Corus Reform on Tees Port.
Business Editors
LONDON--(BUSINESS WIRE)--May 21, 2003
Standard & Poor's--The planned restructuring of U.K.-based steel consortium Corus Group PLC's (Corus; BB-/Watch Neg/B) U.K. operations is not expected to have a negative effect on the ratings on the notes issued by THPA
THPA Finance, a special-purpose entity, depends on cash flow from the Tees and Hartlepool Port and associated businesses to serve its debt. The port relies on Corus for a large part of its business.
The GBP305 million notes issued by THPA Finance are secured by first fixed and floating charges over all the assets and undertakings of THPA Finance and four of its fellow operating subsidiaries, the borrowers. These include PD Teesport Ltd., which owns and operates Tees and Hartlepool Port in northeast England. The borrowers are all subsidiaries of PD Portco Ltd. (Portco), previously named THPA Holdings Ltd.
Corus is one of the world's biggest steel makers and is a very important customer of Portco. In the year to March 2003, revenues generated from all Corus operations, including Teesside, Scunthorpe, and other smaller plants, represented about 21% of Portco's total revenues and about 22% of its operating income.
"Analysis of possible outcomes following Corus' restructuring shows that, in most cases, the business position of PD Teesport will mitigate the potential negative effects of the restructuring on Portco's cash flow and that, with expected limited shareholder support, debt service will continue," said Standard & Poor's credit analyst Maria Lemos.
Failure of the new Corus strategy, however, could have a negative impact on the port's operations in the medium term. "Although much depends on the success of the new strategy at Corus' Teesside operations, failure will not necessarily have a negative impact on the ratings on THPA Finance because Standard & Poor's expects that shareholders will provide financial support and a downgrade will be avoided," said Ms. Lemos.
The commentary article titled "Tees & Hartlepool Port Operator to Weather Corus Restructure; Portco 2003 Results as Expected" was published on May 19, 2003, and is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. Alternatively, call one of Standard & Poor's Ratings Desks: London (44) 20-7847-7400; Paris (33) 1-4420-6705; Frankfurt (49) 69-33-999-223; or Stockholm (46) 8-440-5916. Members of the media may contact the Press Office Hotline on (44) 20-7826-3605 or via media_europe@standardandpoors.com.
ANALYST E-MAIL ADDRESSES
maria_lemos@standardandpoors.com
jan_plantagie@standardandpoors.com
apea_koranteng@standardandpoors.com
stuart_nelson@standardandpoors.com
infrastructureeurope@standardandpoors.com
Copyright (c) 2003, Standard & Poor's Ratings Services
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