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S&P revises Impress outlook to negative
Standard & Poor's said Tuesday it revised its outlook on The Netherlands-based metal packaging company Impress Holdings BV to negative from stable, following expectations that the group's cash flow generation for the full year to Dec. 31 will be lower than previously expected.
"Impress' lower cash flow generation for the full-year 2003 will make it challenging for the group to meet its recently revised covenant schedule in the coming quarters and steep debt amortization schedule in 2004," said S&P credit analyst Vanessa Brathwaite.
At Sept. 30, Impress had net debt of €646 million including a shareholder loan, preference shares, and unfunded pension and postretirement liabilities. The group's credit protection measures were weak for the ratings.
Results for the six months April to September 2003 were below S&P's expectations as they were adversely affected by foreign exchange effects and lower demand in the group's seafood and decorative coatings businesses.
In addition, financial charges arising from the recent bond issue and refinancing further reduced cash flow for the nine months to Sept. 30.
S&P said Impress' results are likely to continue to be affected by the difficult operational environment and adverse foreign-exchange effects, although the latter should be countered at year end as the group has already entered into more balanced hedging agreements for 2004.
"In this difficult environment Impress will be challenged to generate sufficient EBITDA and free cash flow to remain within the financial covenant package on the group's senior facilities and to meet the €60 million of debt amortization in 2004," added Brathwaite.
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