Fitch might up Fairmount Santrol

Fitch Ratings said it placed the B- long-term issuer default ratings of Fairmount Santrol Inc. and Fairmount Santrol Holdings Inc. (FMSA) on rating watch positive.

The watch follows the announcement of a merger with Unimin Corp. in which Fitch expects to provide a more stable stream of cash flows and be deleveraging for Fairmount Santrol.

The proposed merger will result in the delisting of FMSA and listing the new combined entity on the NYSE, with FMSA shareholders receiving $170 million in cash and a 35% stake of the new company. FMSA has already obtaining voting agreements with shareholders representing 26% of outstanding shares.

“Fitch believes the new company will have an improved credit profile over FMSA's current profile, with a stronger more stable cash flow profile from the increased exposure to the industrial segment, reduced customer concentration, and the potential for further improved cash flows upon completion of a company specified $150 million in synergies,” the agency said in a news release.

© 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.