Fitch downgrades Meinian

Fitch Ratings said it downgraded Meinian Onehealth Healthcare Holdings Co., Ltd.’s long-term issuer default rating and senior unsecured rating to B+ from BB-.

Fitch also downgraded the rating on Meinian’s $200 million 7¾% senior unsecured notes due April 2021 to B+ from BB-. Mei Nian Investment Ltd. sold the notes.

“The downgrade reflects the continued challenges Meinian faces in its strategy change toward offering more premium services and expanding its customer base to reduce seasonality and improve the utilization of its medical centers. Meinian’s capex intensity remained high, while revenue fell in 2020, which can be explained only partly by the coronavirus pandemic. Fitch expects Meinian’s negative free cash flow to persist even with a drop in capex due to weaker cash flow generation, which limits the company’s ability to deleverage.,” the agency said in a press release.

The outlook is stable.

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