France: Pipe maker Vallourec to cut jobs to reduce debt burden

French steel pipe maker Vallourec plans to cut jobs in France and Germany to reduce costs and its heavy debt burden, French weekly business magazine Challenges said on Wednesday.

The report said around 1,800 jobs, 1,200 at three sites in France, and 600 in Germany, could be affected by the cost-cutting measure.

A spokesman for the company declined to comment.

The company, which supplies the oil and gas industry, has struggled to recover since oil prices crashed in 2015.

In its third-quarter results on Nov. 15, the company said it was continuing its transformation plan and was generating significant cost reductions, but did not give details.

S&P Global Ratings said on Nov. 21 that although it expected Vallourec's performance to continue to improve in the coming quarters, it believed this will happen at a slower pace than previously anticipated.

S&P lowered Vallourec's rating to "B-" from "B" with a negative outlook.

"The negative outlook reflects that we may further lower the rating over the next three to 12 months if improvement in Vallourec's quarterly profits stalls following setbacks in the company's cost reduction programs," it said.

As of Sept. 30, the company had reported net debt of 2.1 billion euros ($2.37 billion), the rating agency said, adding that Vallourec's key weakness remains its high-cost position, notably in European assets.

Vallourec said after the rating announcement that its liquidity situation was sound.

The company's shares are down 56.6 percent year-to-date.

(With inputs from agencies.)