BP hires investment banks in wake of spill
BP Plc has hired investment banks Blackstone Group LP, Goldman Sachs Group Inc and Credit Suisse Group AG as advisers in the wake of its massive oil spill in the Gulf of Mexico, according to a source familiar with the matter.
BP spokesman Tony Odone said the company had "no comment on who our advisers are and what their role is."
Odone also said there was no truth to a previous report that the company had hired banks with a mandate to defend it from unwanted takeover attempts.
The company has lost more than 40 percent of its market value since the explosion of the Deepwater Horizon rig that led to the worst U.S. oil spill ever.
Millions of gallons of oil have gushed into the Gulf since an April 20 explosion on an offshore rig killed 11 workers and ruptured BP's well. The spill has soiled 120 miles of U.S. coastline, imperiled a multibillion-dollar fishing industry, and killed birds, sea turtles and dolphins.
There has been much speculation about how the company will deal with the potentially huge liabilities arising from the spill.
Analysts and investment bankers have suggested that the company could sell assets if necessary or even become a takeover target.
Some media reports, including one in the New York Times, have even suggested bankruptcy as a worst-case scenario for the British oil company.
U.S. lawmakers have pressured the company to suspend its quarterly dividend and to set up an escrow account to pay damage claims by individuals and businesses hurt by the spill. More than 50 Democratic senators suggested in a letter that BP should make an initial $20 billion payment into an independently managed account to cover compensation for victims and for clean-up.
The source did not specify what the role will be for the banks. Investment bankers generally advise companies on corporate strategy including mergers and acquisitions and financings.
Bankers and lawyers who are not currently advising BP suggested that the banks could be helping the oil company with issues such as its dividend, valuations of various assets and capital raising schemes.
Goldman, Credit Suisse and Blackstone declined to comment.
[Source: By Michael Erman, Reuters, Washington, 14Jun10]
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