Norway's Petroleum Geo Services, which is merging with rival Veritas DGC, had its credit rating cut one notch to junk by Moody's Investors Service because of delays selling assets and reducing debt.
Moody's cut the rating on $1.9 billion of PGS securities to Ba1 from Baa3. The world's second largest mapper of offshore oil reserves planned to close the sale of its Atlantis natural gas unit to China National Chemicals Import and Export Corp. seven months ago.
The Houston based Veritas agreed last week to revise terms of the transaction for a second time this year, dropping the sale of Atlantis as a condition. A majority of Veritas's shareholders and ninety percent of PGS investors must approve the transaction.
The amended terms make it “less certain” that PGS will be able to lower its debt by at least two hundred million dollars by the time it completes its merger with Veritas, Moody's said in a statement.