Friday, February 8, 2008

Fitch Ratings views British court order to freeze up to US$12 billion of PDVSA assets to have minimum impact

Fitch Ratings views a British court order to freeze up to US$12 billion of PDVSA's worldwide assets to have a minimum impact on the company's day to day operations, as well as its near term credit quality and financial flexibility. In order to comply with this court order, PDVSA must maintain $12 billion of unencumbered assets anywhere in the world. The order in and of itself does not prevent PDVSA from transacting business, and from a practical perspective transferring assets given its total consolidated asset base of more than US$92 billion. PDVSA is expected to oppose this decision and present their opposing arguments later this month. The enforcement of this order and the applicability of British jurisdiction over assets domiciled outside of the UK remain unclear at this time.

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