Fitch warns TNK-BP that board spat could cost its debt rating
RATINGS agency Fitch has warned that fresh boardroom acrimony at Russian oil firm TNK-BP could result in a debt rating downgrade.
Fitch said the resignation of chief executive and key investor Mikhail Fridman this week “is the latest in a series of signs that some form of separation between the joint venture’s partners appears to be growing”.
BP, which has a 50 per cent stake in TNK-BP, has said that Fridman’s role was “ceremonial” but has locked horns with him on several issues including BP’s failed £10bn tie-in with Rosneft.
While Fitch has taken no rating action yet, it warned that the company needs to give “clearer messages” on how it will be run if it wants to keep its BBB- rating.
TNK-BP’s board of directors has not met since December 2011 as it lacked the minimum number of members to act after two independent directors resigned, and Fitch said it considers the effectiveness of the board as “weak”.
The agency last put TNK-BP on downgrade watch in 2008, when trouble flared between BP and AAR, the billionaires who own the other 50 per cent stake. Fridman is one of the oligarchs represented by the AAR vehicle.