Aug. 19, 2002 — Aquila Inc. announced recently that Fitch Ratings notified the company that it has revised its ratings outlook from stable to negative.
Aquila executives will meet on Tuesday with representatives of Moody’s Investor Services, Fitch Ratings and Standard & Poor’s Corp. to update the rating agencies on the aggressive actions the company has taken to significantly reduce debt and strengthen its credit metrics. Despite the Fitch action, the company remains optimistic about its meeting on Tuesday.
With Fitch’s action recently, Aquila still maintains its investment grade credit rating with the rating agency. As noted in its second quarter Form 10-Q, the company believes that its $754 million of liquidity is more than adequate to withstand the range of possibilities that could be announced by one or all three of the credit rating agencies.
“We continue to look forward to our update tomorrow with Fitch and the opportunity to share with them the tremendous progress we’ve made on our asset sales and cost reductions to strengthen our credit metrics,” said Dan Streek, Aquila chief financial officer.
On August 16, Aquila released information outlining initiatives taken in the past six months that have favorable implications for its risk profile, cash flows and credit ratings. These actions include:
* Terminating the Cogentrix acquisition
* Reducing its dividend by 42 percent
* Exiting from the wholesale energy trading business
* Completing equity and debt offerings totaling $764 million in proceeds
* Identifying over $100 million in cost reductions, the majority of which have already been achieved
* Targeting over $1 billion in asset sales. To date Aquila has signed sale agreements totaling $483 million and publicly announced bid processes for the sale of its New Zealand and United Kingdom investments.
“We remain optimistic about the outcome of our review process and continue to stay focused on the completion of our numerous pending asset sales,” said Streek.”
Based in Kansas City, Missouri, Aquila operates electricity and natural gas distribution networks serving more than six million customers in seven states and in Canada, the United Kingdom, New Zealand and Australia. The company also owns and operates power generation and mid-stream natural gas assets. At June 30, 2002, Aquila had total assets of $11.9 billion. More information is available at www.aquila.com.