...Cash Flow Focus: Alpek's `BBB¡' ratings are on Rating Watch Negative (RWN) due to the confluence of pressured margins, elevated dividends, high capex and the potential acquisition of Petrobras's (BB/Negative) polyester assets for USD385 million. The RWN was maintained after M&G, Alpek's largest customer, failed to make payments to the company. Fitch Ratings presents this scenario analysis to assess factors that could resolve the RWN, focusing on the potential size of divestitures, discretionary capex and shareholder dividends. Financial Discipline Is Critical: Fitch's scenario analysis indicates that dividend and capex restraint, rather than net proceeds from asset acquisitions and divestitures, is the key factor in determining whether Alpek will maintain investment- grade ratings. Factors that would most likely support this goal are dividend and capex spending under USD600 million over two years and net proceeds from asset sales of around USD200 million. Absent proceeds from net asset...
