S&P places OCI on developing watch

S&P said it placed its OCI NV’s ratings, including its BBB- issuer rating on CreditWatch with developing implications.

On Friday, the company reported it agreed to sell its 50% stake in Fertiglobe to Adnoc for $3.62 billion and on Monday, OCI announced the sale of its stake in IFCO to Koch for $3.6 billion. Both deals are expected to close in 2024.

“The allocation of about $7.2 billion in proceeds will be key in determining the rating. We understand OCI's management will remain strongly committed to an investment-grade rating for the retained business. In addition, the disposal transactions bring very material cash proceeds that by nature are mechanically positive to the group's credit metrics. The deals will bring the company in a net cash position, at least temporarily.

“Nevertheless, the rating will depend on clarifying the capital structure target for the remaining business, which will largely depend on the size of exceptional shareholders payments following these transactions as well as on the actual debt reduction,” S&P said in a press release.

The developing watch indicates S&P could raise, lower or affirm OCI’s ratings in the coming weeks.

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