BP (NYSE:BP) CEO Bob Dudley is under increasing pressure to restore the dividend of BP, as rivals increase their margin of growth over the oil giant.
This of course must include the increase of the share price of BP in the aftermath of the Gulf oil spill, and the remaining uncertainties as to the level of liability BP will face.
The major unknown continues to be whether BP will be designated as being grossly negligent in the circumstances. At stake is billions in liability.
One major reason for the pressure to restore the dividend is to call the bluff of the company at to their confidence going forward. A dividend is one of those elements confirming the confidence of management concerning the future of a company.
If the dividend isn't restored, shareholders will probably flee the company, opening them up to being taken over, as some rumors have already been circulating about.
Showing posts with label BP Liquidity. Show all posts
Showing posts with label BP Liquidity. Show all posts
Monday, October 25, 2010
Friday, September 24, 2010
BP (NYSE:BP) Loan Could be Boosted to $2.25 Billion
A $2 billion loan sought by BP (NYSE:BP) could be increased to $2.25 billion, as the deal, back by Azerbaijan oil sales, drew more demand than expected.
The 15-plus banks part of the deal offered to lend more than the amount sought by BP.
Revenue from the Azeri-Chirag- Deepwater Gunashli field in the waters of Azerbaijan is the collateral for the loan.
BP is borrowing another $3 billion using collateral from their operations in Angola. That deal will remain as it is, and won't be bumped up.
The loans are for five years, and BP will pay 250 basis points over the London interbank offered rate in the first year, 300 after the second year, and 325 after three years.
The 15-plus banks part of the deal offered to lend more than the amount sought by BP.
Revenue from the Azeri-Chirag- Deepwater Gunashli field in the waters of Azerbaijan is the collateral for the loan.
BP is borrowing another $3 billion using collateral from their operations in Angola. That deal will remain as it is, and won't be bumped up.
The loans are for five years, and BP will pay 250 basis points over the London interbank offered rate in the first year, 300 after the second year, and 325 after three years.
Wednesday, September 8, 2010
BP (NYSE:BP) Raised Up Three Levels by Fitch Ratings
BP's (NYSE:BP) credit rating got a boost today as Fitch Ratings raised the credit rating of the company by three notches, from BBB to A. That will lower the cost of borrowing if the company chooses to go that route in the future.
The increase in rating included the long-term issuer default rating along with the senior unsecured rating. Fitch also considers BP as being stable in their outlook.
Fitch said the rating increase "reflects both the improved visibility of potential liability scenarios” and “substantial progress that BP has made to date in building up liquidity to address potential financial payments.”
They added that the permanent plugging of the oil leak was a major factor as well.
On June 15 Fitch has cut BP's credit rating six levels to BBB.
The increase in rating included the long-term issuer default rating along with the senior unsecured rating. Fitch also considers BP as being stable in their outlook.
Fitch said the rating increase "reflects both the improved visibility of potential liability scenarios” and “substantial progress that BP has made to date in building up liquidity to address potential financial payments.”
They added that the permanent plugging of the oil leak was a major factor as well.
On June 15 Fitch has cut BP's credit rating six levels to BBB.
Friday, July 9, 2010
BP (NYSE:BP) Up Fourth Straight Day
For the fourth trading day in a row, BP (NYSE:BP) ended up in positive territory, as perceptions it's getting close to plugging the well, and they may get more liquid through investment from the Middle East.
Neither of these are a guarantee in the short term, and both could come back to bite them quickly if they fail.
The optimism they may plug the well before original estimates in being run with by the media, even though caveats they're unlikely to do so have been thrown out to balance that idea.
It's possible, but everything would have to fall into place perfectly for that to happen, and more than likely the middle of August will still be the approximate time they'll reach that goal, although even plugging the oil well isn't guaranteed at that time.
BP CEO Tony Hayward has been globe trotting, presenting the idea he is out there working on getting some liquidity into the company through investments from Middle Eastern sovereign wealth funds or large corporations in the region.
That is important because they're trying to build a defense against a possible takeover, which they could be under huge pressure to accept in light of the oil spill fiasco.
They've also secured funding through $1 billion in guaranteed loans from at least 9 banks at last count, which they'll be able to tap quickly if needed.
Much of this gives the company breathing room, but not much else, yet it's a lot better than they were just a week or so ago, and investors seem to agree with that assessment by voting their dollars in the oil giant.
BP finished Thursday at $33.74, a $0.55 gain, or 1.66 percent. Market cap at the end of the day was $105.63 billion.
Neither of these are a guarantee in the short term, and both could come back to bite them quickly if they fail.
The optimism they may plug the well before original estimates in being run with by the media, even though caveats they're unlikely to do so have been thrown out to balance that idea.
It's possible, but everything would have to fall into place perfectly for that to happen, and more than likely the middle of August will still be the approximate time they'll reach that goal, although even plugging the oil well isn't guaranteed at that time.
BP CEO Tony Hayward has been globe trotting, presenting the idea he is out there working on getting some liquidity into the company through investments from Middle Eastern sovereign wealth funds or large corporations in the region.
That is important because they're trying to build a defense against a possible takeover, which they could be under huge pressure to accept in light of the oil spill fiasco.
They've also secured funding through $1 billion in guaranteed loans from at least 9 banks at last count, which they'll be able to tap quickly if needed.
Much of this gives the company breathing room, but not much else, yet it's a lot better than they were just a week or so ago, and investors seem to agree with that assessment by voting their dollars in the oil giant.
BP finished Thursday at $33.74, a $0.55 gain, or 1.66 percent. Market cap at the end of the day was $105.63 billion.
Wednesday, July 7, 2010
BP (NYSE:BP) Shares Soar on Rejection of Issuing New Stock
Shareholders were holding their breath concerning whether or not BP (NYSE:BP) was going go the route of issuing new stock to raise more capital.
BP shot that idea down quick, as jittery shareholders may have bolted the company if they had added diluting the shares they owned on top of eliminating their dividend as well.
Other than selling assets in the company and lining up a number of banks for loans worth about $9 billion in case they need to get quick funding, the other key strategy is to go after sovereign wealth funds, which CEO Tony Hayward has been traveling around the globe trying to do.
BP is of course looking at all types of investment in the stock, as they're trying to get ahead of the game in case someone attempts to acquire them in their weakened state.
The oil giant closed Tuesday's trading session at $31.91 a share, gaining $2.56, or 8.72 percent. Their market cap is just under $100 billion after the surge.
BP shot that idea down quick, as jittery shareholders may have bolted the company if they had added diluting the shares they owned on top of eliminating their dividend as well.
Other than selling assets in the company and lining up a number of banks for loans worth about $9 billion in case they need to get quick funding, the other key strategy is to go after sovereign wealth funds, which CEO Tony Hayward has been traveling around the globe trying to do.
BP is of course looking at all types of investment in the stock, as they're trying to get ahead of the game in case someone attempts to acquire them in their weakened state.
The oil giant closed Tuesday's trading session at $31.91 a share, gaining $2.56, or 8.72 percent. Their market cap is just under $100 billion after the surge.
Tuesday, July 6, 2010
BP (NYSE:BP) Not Issuing New Shares to Raise Capital
BP is resisting issuing new shares in the company to raise capital, looking rather to bank credit lines and selling of assets as the major strategy to provide more liquidity as needed.
This probably comes from the inevitable dilution of share which would drive down the value of the stock. BP has to be very much aware of the dissatisfaction in the company by shareholders who were counting on the dividend the company normally pays out, which was discontinued at this time.
So to dilute the shares after losing half its value and ending the dividend for now, wouldn't be the best of strategies for oil giant, probably the reason they aren't going that route.
BP has also lined up a number of banks to provide them will immediate loans, with each bank committing about $1 billion. That brings the total available to about $9 billion, although other banks are reportedly going to offer a similar amount as well.
Much of this is not only to pay for claims and liabilities related to the Gulf, but at the same time set up a defensive strategy to combat potential takeover attempts by unwelcome suitors.
This probably comes from the inevitable dilution of share which would drive down the value of the stock. BP has to be very much aware of the dissatisfaction in the company by shareholders who were counting on the dividend the company normally pays out, which was discontinued at this time.
So to dilute the shares after losing half its value and ending the dividend for now, wouldn't be the best of strategies for oil giant, probably the reason they aren't going that route.
BP has also lined up a number of banks to provide them will immediate loans, with each bank committing about $1 billion. That brings the total available to about $9 billion, although other banks are reportedly going to offer a similar amount as well.
Much of this is not only to pay for claims and liabilities related to the Gulf, but at the same time set up a defensive strategy to combat potential takeover attempts by unwelcome suitors.
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