Fitch: No change for Molymet

Fitch Ratings said the BBB and A+(cl) ratings of Molibdenos Y Metales SA (Molymet) remain unchanged following an agreement with China Molybdenum to purchase a 50% stake in its subsidiary, Luoyang High-Tech Molybdenum & Tungsten Material (LuoMo High-Tech). China Moly, a partly state-owned company, will own the remaining 50% of LuoMo High-Tech, which will be run as a joint venture.

The acquisition will help Molymet gain a foothold in the Chinese market, a key target for the company's overall growth strategy, Fitch said.

The purchase price of $37.7 million is expected to be funded with cash on hand. The transaction will have a small leveraging affect on Molymet's balance sheet with net leverage increasing to about 1x from 0.7x net debt-to-EBITDA as of Dec. 31, which still is consistent with its rating category, the agency said.

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