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Ocean Intelligence comments on Aegean credit downgrade

07 Jun 2018

The series of events leading up to investigations against New York-listed Aegean Marine Petroleum Network (Aegean) has resulted in maritime credit analysis firm Ocean Intelligence (OI) having ‘little choice’ but to downgrade the former’s credit rating, it says.

“Questions certainly need to be asked about what took place,” Simon Millar, Managing Analyst, Ocean Intelligence told Manifold Times in a response to an earlier article.

“In March this year Aegean stated that it made allowances for doubtful debts of USD 11.18 million at end-2017, and it now has bad debts of USD 200 million.

“These are somewhat different amounts of money.”

An internal audit conducted by the new management at Aegean uncovered approximately $200 million of accounts receivable owed to the company at December 31, 2017 by four counterparties that need to be written off. 

The amounts, owned by the similar parties, accumulated from approximately $172 million as of December 31, 2016 and $85 million as of December 31, 2015.

The news prompted the market to respond in a largely negative manner; share prices of Aegean fell $2.03 from $2.85 per share on June 4, 2018 to $0.82 per share on June 5, 2018 representing a decline of about 71% on Tuesday.

“However, from a business perspective, bunker market participants are far more concerned with what’s going to happen to Aegean from here onwards,” says Millar who added OI last downgraded Aegean’s credit rating to "Credit a matter of trust in principals" in the middle of May 2018.

Aegean’s credit rating before the May downgrade was at USD high-seven figures, reduced from USD low-eight figures in early 2017.

“There is a frenzy of speculation in the sector, much of which is relatively baseless,” he notes.

“Until some clarity emerges, we have little choice but to downgrade Aegean to "Trading not advised on any basis".

A timeline-accurate list of events preceding the current development can be found below:
Related: Aegean shares down 71%, to face legal investigations
RelatedAegean audit uncovers $200 million account discrepancy
RelatedAegean unfolds several business developments
RelatedAegean drops founder, elects new board members
RelatedAegean requests for ‘additional time’ to file annual report
RelatedAegean welcomes new Chief Financial Officer
RelatedLawsuit filed against Aegean’s H.E.C. acquisition
RelatedAegean to offer ‘one-stop-shop solution’ with H.E.C. acquisition
RelatedAegean in $367 million acquisition of port reception facilities services group
RelatedAegean shareholders ‘gravely concerned’ over board’s silence
RelatedShareholders nominate ‘highly qualified’ candidates to Aegean board
RelatedAegean Marine Petroleum Network under shareholder pressure

Publication date: 7 June, 2018
 

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