May 22 - Standard & Poor's Ratings Services today said that its ratings and
outlook on U.S.-based engineering and construction company The Shaw Group Inc.
(BBB-/Stable/--) are not affected by the company's announcement that it
will sell substantially all of its energy and chemicals business to Technip
(BBB+/Stable/A-2) for approximately $300 million. The company is targeting the
transaction to close in fourth quarter of its 2012 fiscal year (ending Aug. 31).
Shaw has said it will retain its obligations under the engineering,
procurement, and construction contract associated with an ethylene plant in
Asia that is now approximately 98% complete. These obligations caused the
energy and chemicals segment to write down $183.7 million pretax ($118.1
million aftertax) during fiscal 2011, primarily from cost increases and
schedule delays. Because it is almost complete, we do not think retaining this
project will affect our rating on Shaw. Shaw also indicated it will retain
energy and chemicals group personnel in its Baton Rouge office, as well as
Shaw Consulting International Inc.
For the complete corporate credit rating rationale, please see Standard &
Poor's summary analysis on The Shaw Group Inc. published Dec. 5, 2011, on