Moody's Investors Service has downgraded from A3 to Baa1 the long-term senior unsecured issuer rating of Altadis SA (Altadis). At the same time, Moody´s has affirmed the Prime-2 short-term rating of Altadis SA and its guaranteed subsidiary Altadis Financial Services SNC. The rating outlook is stable.
The rating action is in response to the announcement made by the company that it had successfully acquired 80 percent of the shares in Regie des Tabacs (RdT) to the Moroccan government, for a total cash amount of Euro 1.3 billion ($1.52 million), valuing 100 percent of the company at approximately Euro 1.7 billion or 18x Ebitda.
The transaction, which is fully priced, will be debt funded through a bridge facility, which will be refinanced either through a bond issue or a syndicate bank facility. Moody´s has factored an adequate liquidity risk assessment for Altadis and has assumed that there will be no structural subordination resulting from the funding of this transaction.
Moody´s commented that there was limited room at this rating level for additional debt financed acquisitions. Although Altadis will benefit from RdT´s very strong position in the tobacco industry in Morocco (85 percent market share), and its significant growth potential, it also exposes Altadis to the sovereign risk of The Kingdom of Morocco (Ba1 negative outlook) as well as to a certain amount of integration risk. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
