S&P cuts Ignition Topco

S&P said it lowered its ratings for Ignition Topco BV, the parent of IGM Resins, and its debt to CCC from CCC+. The recovery rating remains 3, reflecting an expected weighted average recovery of 55% (rounded estimate).

“We anticipate that IGM Resins' FOCF will be negative in 2023, with leverage well above 10x, due to the continued weak economic environment and high exceptional costs. For the first five months of 2023, IGM Resins reported significantly lower sales and EBITDA compared with its budget and last year's results. The underperformance stemmed mainly from low market demand, combined with continued competitive pressure from China in core photoinitiators, and significant cost impact from underutilized manufacturing sites in Mortara and the Charlotte plant, with the Anqing plant still ramping up,” the agency said in a press release.

S&P said it forecasts lower revenue of about €240 million-€250 million in 2023 and €270 million-€290 million in 2024.

The agency warned it sees an increased risk of “a debt restructuring that we could view as distressed.”

The outlook is stable.

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