Bulletin: Rumo S.A.'s Sale Of 80% Stake In EPSA Will Reduce Leverage And Bolster Liquidity

SAO PAULO (S&P Global Ratings) July 18, 2022—S&P Global Ratings said today that Rumo S.A.'s (BB-/Stable/B) sale of an 80% stake in its subsidiary Elevações Portuárias S.A. (EPSA) for about R$1.4 billion to Corredor Logística e Infraestrutura (CLI) will help reduce leverage. Rumo's debt to EBITDA has been about 4.0x since the end of 2021, compared with our expectation of close to 3.0x by the end of 2022. EPSA is Rumo's small subsidiary, representing a low portion of total cash flows. Moreover, the sale will improve Rumo's liquidity position to support capital expenditures (capex) in the coming years. In September 2021, Rumo signed a contract to construct and operate a new railroad in the state of Mato Grosso, which will

...July 18, 2022 SAO PAULO (S&P Global Ratings) July 18, 2022--S&P Global Ratings said today that Rumo S.A.'s (##-/Stable/B) sale of an 80% stake in its subsidiary Elevat)es Portußrias S.A. (EPSA) for about R$1.4 billion to Corredor Logfstica e Infraestrutura (CLI) will help reduce leverage. Rumo's debt to EBITDA has been about 4.0x since the end of 2021, compared with our expectation of close to 3.0x by the end of 2022. EPSA is Rumo's small subsidiary, representing a low portion of total cash flows. Moreover, the sale will improve Rumo's liquidity position to support capital expenditures (capex) in the coming years. In September 2021, Rumo signed a contract to construct and operate a new railroad in the state of Mato Grosso, which will connect Cuiabß (the state capital) and Lucas do Rio Verde to the Rondon=polis road-rail terminal. Rumo is still waiting for the regulatory approval and environmental permits, but expects to start deploying capex in 2023. Total expected capex for this project...

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