Bulletin: Woolworths Well-Placed To Navigate Drinks-Split Complexities

MELBOURNE (S&P Global Ratings) Feb. 24, 2021--Australia-based Woolworths Group Ltd. (BBB/Stable/A-2) is well-placed to deal with the complexities around its plan to separate its drinks business, S&P Global Ratings said today, although the reduction in the group's scale and diversity could weigh on credit quality. Woolworths has re-affirmed its intention to separate the high-margin liquor and hotel business, Endeavour Group (EG), with an estimated completion in mid calendar 2021. Post separation, we will seek to understand the ongoing linkages with EG and the resulting impact on Woolworths earnings profile. In addition, Woolworths future capital structure, including total operating lease obligations, and management's financial stance will frame our assessment of its credit quality following the separation of EG. In our view,

...February 23, 2021 MELBOURNE (S&P Global Ratings) Feb. 24, 2021--Australia-based Woolworths Group Ltd. (###/Stable/A-2) is well-placed to deal with the complexities around its plan to separate its drinks business, S&P Global Ratings said today, although the reduction in the group's scale and diversity could weigh on credit quality. Woolworths has re-affirmed its intention to separate the high-margin liquor and hotel business, Endeavour Group (EG), with an estimated completion in mid calendar 2021. Post separation, we will seek to understand the ongoing linkages with EG and the resulting impact on Woolworths earnings profile. In addition, Woolworths future capital structure, including total operating lease obligations, and management's financial stance will frame our assessment of its credit quality following the separation of EG. In our view, the remaining business will be affected by the reduction in the group's scale and diversity and could impact its credit strength. While Woolworths...

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