Fitch applies BB+ to Elis

Fitch Ratings said it assigned Elis SA a long-term issuer default rating of BB+ with a stable outlook.

Fitch said the rating reflects a stronger business profile following the transformational acquisition of Berendsen, which improves the group's scale, market position and diversification and will allow for future cost and capex savings.

“Profitability is strong relative to rated peers, but post transaction leverage will remain high and deleveraging will be contingent on management's ability to generate cost savings from the acquisition as well as other areas of the business,” the agency said in a news release.

“The high leverage reduces the headroom at the current rating, and the lack of meaningful deleveraging possibly resulting from further debt-funded M&A could put the ratings under pressure.

“This is despite our confidence in Elis's deleveraging capacity resulting from solid free cash flow (FCF) generation.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.