Elementia S.A.B. de C.V. - S&P Global Ratings’ Credit Research

Elementia S.A.B. de C.V.

Elementia S.A.B. de C.V. - S&P Global Ratings’ Credit Research
Elementia S.A.B. de C.V.
Published Dec 13, 2019
15 pages (5275 words) — Published Dec 13, 2019
Price US$ 500.00  |  Buy this Report Now

About This Report

  
Abstract:

Following the spin-off, Elementia will stop controlling the metals and building systems' assets, operations, revenues, and EBITDA, while effects on the company's balance sheet remain unclear. The company intends to transfer about 20% of its total debt to the spun-off company, along with its assets and certain cash reserves, estimated at 30% of total. Furthermore, we understand that there will be cross-guarantees in place between Elementia and the new company to protect creditors initially. The existence of this guarantees would prompt us to adjust the company's reported debt. Therefore, this could result in a pro forma debt to EBITDA of more than 5.0x for the next year--above our previous assumptions--depending on the company's capacity to deleverage. The spin-off is still

  
Brief Excerpt:

...Elementia on CreditWatch negative since the announced spin-off, which could have material implications for credit metrics. On April 4, 2019, Elementia announced its reorganization, and subsequently, received approval from its shareholders. The plan mainly consists of splitting Elementia by transferring its metals and building system divisions to a new company. The cement division would remain under Elementia. In our view, the restructuring could have important implications for Elementia's credit profile, given the size of each division. We estimate that the metals and building systems divisions will account for roughly 60% of Elementia's consolidated revenue, while EBITDA from these divisions will represent almost 30% by the end of 2019. The metals and building systems divisions are lower-margin businesses. Following the spin-off, Elementia will stop controlling the metals and building systems' assets, operations, revenues, and EBITDA, while effects on the company's balance sheet remain...

  
Report Type:

Full Report

Ticker
3255475Z@MM
Issuer
GICS
Construction Materials (15102010)
Sector
Global Issuers, Structured Finance
Country
Region
Latin America
Format:
PDF Adobe Acrobat
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Elementia S.A.B. de C.V." Dec 13, 2019. Alacra Store. Mar 29, 2024. <http://www.alacrastore.com/s-and-p-credit-research/Elementia-S-A-B-de-C-V-2358584>
  
APA:
S&P Global Ratings’ Credit Research. (). Elementia S.A.B. de C.V. Dec 13, 2019. New York, NY: Alacra Store. Retrieved Mar 29, 2024 from <http://www.alacrastore.com/s-and-p-credit-research/Elementia-S-A-B-de-C-V-2358584>
  
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