S&P changes Eolo outlook to negative

S&P said it changed its outlook for Eolo SpA to negative from stable and affirmed its B- ratings on the company and its senior secured notes.

The agency said it estimates Eolo’s capital expenditures in fiscal year 2024 and 2025 will push its annual free cash flow after lease payments to negative €60 million in 2024 and €44 million in 2025 compared with negative €67 million in 2023 and negative €82 million in 2022.

“The outlook revision reflects our expectation of tightening liquidity, as well as the increased risk that we will assess the company's capital structure as unsustainable. We view Eolo's liquidity management as tight and risky based on our expectation that its liquidity sources–including the limited availability under its RCF–will be fully absorbed by its sizeable growth capex. This will leave the company without liquidity headroom for unforeseen developments absent the receipt of additional funding,” S&P said in a statement.

The agency said it does not expect a liquidity crisis.

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