* Galan says downgrade to BBB 'no problem'
* Reaffirms plan to cut debts, maintain dividends
By Environment Correspondent Alister Doyle
DOHA, Dec 2 The chairman of Spanish power group
Iberdrola shrugged off a credit downgrade by Standard &
Poor's as "no problem" on Sunday and reaffirmed plans to reduce
debts while maintaining dividends.
Ignacio Galan, speaking on the sidelines of a U.N. meeting
in Doha on fighting climate change, told Reuters that S&P was
downgrading his firm's rating mainly because Spain's own
sovereign investment grade had been reduced to near junk.
"It's no problem," he said of S&P's downgrade for Iberdrola
last week to BBB from BBB+. "We have already covered our
financial needs for the next three years, we have liquidity of
11 billion euros" ($14.3 billion), he said.
He said the firm, the world's largest operator of wind
farms, was sticking to a plan outlined last month to reduce its
debt by 6 billion euros by 2014 to 26 billion, sell assets and
cut the workforce.
"Even if we continue paying the same level of dividend as
today we should be allowed to reduce this 6 billion," he said,
based on projections for cash flow and divestments.
The company has said it will keep the percentage of profits
dedicated to dividends at 60 percent. Net profit for the first
nine months rose 12 percent to 2.4 billion euros.
Making the downgrade, S&P said it was concerned about
possible delays in electricity tariff deficit securitisation and
pointed to difficult economic times in Iberdrola's key markets.
Electricity tariff deficits are the shortfall between the
amount customers pay for electricity, as determined by energy
regulator CNE, and the cost of generating it. It appears on the
utilities' books as government-backed debt.
Galan said 1.75 billion euros was securitised late last
week. "If they (S&P) had delayed the decision a week probably
they would not do it," he said.
He said 70 percent of Iberdrola's business was abroad - in
countries including Britain, the United States and Brazil more
insulated from Spain's woes. He accused S&P of punishing
Iberdrola for having its headquarters in Spain.
Moody's and Fitch had maintained Iberdrola's ratings, he
At a business event in Qatar, Galan also called for more
efficient technologies to help 1.3 billion people - a fifth of
the global population - who have no electricity.
Iberdrola says its greenhouse gas emissions are half the
average for European utilities, thanks to its stress on
Galan also said the best mix of power, balancing cost and
environmental impacts, was gas, nuclear, wind and hydro. Coal
was unattractive because of greenhouse gas emissions and solar
photovoltaic power was slightly too costly.
($1 = 0.7689 euros)
(Reporting by Alister Doyle; Editing by Dale Hudson)