Fitch assigns Flamingo B-, loans B

Fitch Ratings said it assigned Flamingo Group International Ltd. a first-time long-term issuer default rating B-. The outlook is stable. The agency also assigned a senior secured debt rating of B with a recovery rating of RR3 to the company's €237 million term loan B and €15 million revolving credit facility.

“The B- rating reflects Flamingo's modest EBITDA in a highly fragmented agriculture-like floriculture market with a concentrated customer base and limited expected free cash flow (FCF) generation for 2023-2027. This is balanced by its low-cost production location and cost-optimization measures supporting a durable profitability recovery amid expected consistent market growth post-Covid-related demand volatility,” Fitch said in a press release.

The stable outlook reflects a forecast for gradual EBITDA expansion that will help turn FCF positive, albeit mildly, after 2024, which will be adequate for business needs, and leverage being maintained at or below 4x in the medium term, the agency said.

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