June 29, 2010, 6:43 p.m. EDT
BP has options before bankruptcy, lawyers say
But oil giant may file [for Chapter 11] to avoid 'perpetual' liability, bankers and lawyers warn
By Alistair BARR, MarketWatch:
"SAN FRANCISCO (MarketWatch) -- BP PLC has several options to explore in dealing with the worst environment disaster in U.S. history, but the oil giant may file for bankruptcy if it faces a never-ending flow of claims, lawyers and bankers said Tuesday.
"BP has many options besides bankruptcy and is a long way from exhausting those," said Loretta CROSS, a national managing partner at Grant THORNTON's corporate-advisory and restructuring-services group, during a conference call organized by the American BANKRUPTCY Institute.
The Deepwater HORIZON platform exploded on April 20, killing 11 people. It sank two days later, triggering a massive OIL leak that's still spewing OIL and GAS. BP shares have plummeted on concern that the company could be overwhelmed by tens of billions of dollars in claims and other liabilities.
CROSS, who specializes in energy-company reorganizations, estimated Tuesday that BP (BP 27.84, +0.17, +0.61%) needs roughly $30 billion in cash OUTSIDE of what the company can generate from its BALANCE sheet.
"Finding that $30 billion among their assets is a better solution than filing for bankruptcy and the ramifications it would have for BP's business partners as well as its reputation," she remarked during the conference call.
BP could sell up to $30 billion in debt and still be at the industry average for debt to earnings, before interest, taxes, depreciation and amortization, according to CROSS.
The company also has tangible assets with a total value of about $232 billion, giving it "an enormous war chest" to tap if necessary. What's more, BP could reduce capital expenditures, which totaled about $52 billion over the past two years. However, this would be the least attractive option because it would dent the company's future income, she said.
BP also spent roughly $10 billion a year over the past two years on dividends and those will likely be "curtailed or reduced," CROSS added"...
SOURCE / QUELLE dieses Ausschnitts:
www.marketwatch.com/story/...bankruptcy-lawyers-say-2010-06-29
www.ifitwasmyhome.com ...
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