Moody’s reviews TPC for trim

Moody’s Investors Service said it placed the ratings of TPC Group Inc. under review for downgrade following the Nov. 27 explosion and fire at its Port Neches facility. The review is expected to take three to six months to complete. Port Neches accounted for roughly a fourth of the company’s EBITDA and will likely be down for an extended period, the agency said.

“The explosion and fire severely damaged the facility and we suspect that it will take up to six months to get a better estimate of the ultimate impact on TPC, the capital required to rebuild the facility and how it will impact TPC’s relationship with its suppliers,” said John Rogers, a senior vice president at Moody’s and lead analyst on TPC.

TPC appears to have adequate insurance, but there is significant uncertainty over the company’s ability to rebuild the facility given the increase in construction costs on the Gulf Coast over the past several years, as well as the length of the outage. Insurance policies will likely prevent any deterioration in liquidity over the next year or two, Moody’s said.

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