Bulletin: Minerva S.A.'s Up To R$1 Billion Capital Increase Should Provide Cushion To Its Financial Risk Profile

SAO PAULO (S&P Global Ratings) Sept. 12, 2018--S&P Global Ratings said today that Minerva S.A.'s (global scale: BB-/Stable/--; national scale: brAA+/Stable/--) proposed capital increase of up to R$1 billion is a positive factor for credit quality, although it won't immediately affect the ratings. The capital increase will provide cushion for the company's credit metrics and, if it reaches the full subscription, could lower pro-forma debt to EBTIDA to close to 4.3x from the current 5.1x level in June 2018. This ratio could also potentially be below 4.0x by the end of 2018, sustaining our view of Minerva's currently aggressive financial risk profile. In addition, Salic (UK) Limited and VDQ Holdings S.A. (not rated) should maintain their current ownership level at

...SAO PAULO (S&P Global Ratings) Sept. 12, 2018--S&P Global Ratings said today that Minerva S.A.'s (global scale: ##-/Stable/--; national scale: brAA+/Stable/--) proposed capital increase of up to R$1 billion is a positive factor for credit quality, although it won't immediately affect the ratings. The capital increase will provide cushion for the company's credit metrics and, if it reaches the full subscription, could lower pro-forma debt to EBTIDA to close to 4.3x from the current 5.1x level in June 2018. This ratio could also potentially be below 4.0x by the end of 2018, sustaining our view of Minerva's currently aggressive financial risk profile. In addition, Salic (UK) Limited and VDQ Holdings S.A. (not rated) should maintain their current ownership level at Minerva, because both have committed to follow the capital increase proportionally, therefore not affecting our view of group status. The cash inflow will give Minerva some short-term flexibility, because the volatile exchange rate...

Bulletin