Bulletin: Selecta's Proposed Notes Tap Is Unlikely To Hamper Free Operating Cash Flow Generation

LONDON (S&P Global Ratings) Oct. 15, 2019--S&P Global Ratings said today that Selecta Group B.V.'s (Selecta; B/Stable/--) proposed tap of senior secured notes is unlikely to meaningfully impair free operating cash flow (FOCF) generation. The group is proposing to tap its existing €1.3 billion senior secured notes to repay about €100 million of drawings under its revolving credit facility (RCF), which was drawn to fund restructuring costs, notably in the U.K. and France, as part of the ongoing integration of Pelican Rouge and Argenta, and to make bolt-on acquisitions. We expect margins to improve over the next two years owing to a decline in restructuring costs, alongside a fall in capital expenditure to about 7.5% by financial year (FY) ending

...October 15, 2019 LONDON (S&P Global Ratings) Oct. 15, 2019--S&P Global Ratings said today that Selecta Group B.V.'s (Selecta; B/Stable/--) proposed tap of senior secured notes is unlikely to meaningfully impair free operating cash flow (FOCF) generation. The group is proposing to tap its existing 1.3 billion senior secured notes to repay about 100 million of drawings under its revolving credit facility (RCF), which was drawn to fund restructuring costs, notably in the U.K. and France, as part of the ongoing integration of Pelican Rouge and Argenta, and to make bolt-on acquisitions. We expect margins to improve over the next two years owing to a decline in restructuring costs, alongside a fall in capital expenditure to about 7.5% by financial year (FY) ending Sept. 30, 2020, from about 9% in FY2018. As a result of the investments, we now expect leverage to be around 7x in FY2020, while the increase in Selecta's cash-interest cost by about 3 million per year will not impair the group's ability...

Bulletin