BANGALORE (Thomson Financial) - Standard & Poor's Ratings Services said it
has assigned a 'B-' rating to the proposed 310 mln usd senior unsecured
convertible bond issue due 2013 of Central European Distribution Corp (CEDC),
which makes and distributes liquor in Poland.
The ratings agency said bond rating is two notches lower than the 'B+'
corporate credit rating with a stable outlook on CEDC reflecting the
prior-ranking liabilities, made up of the secured debt and the trade payables,
in the company's capital structure.
S&P said the proceeds from the bond issue will be used to finance part of
the planned acquisition of an 85 pct equity stake in Russian manufacturer of
alcoholic beverages, Parliament, and a 75 pct equity stake in the Whitehall
Group, an importer and distributor of premium spirits.
The rating on CEDC is constrained by the company's exposure to the vodka
market, limited geographic and product diversification, and by its current
highly leveraged profile resulting from an ambitious growth strategy and
opportunistic acquisitions, S&P said in a statement.
Following the acquisitions, CEDC is expected to reduce its dependence on the
Polish vodka market, which has been contributing 95 pct of CEDC's revenue, the
ratings agency said.
This would bring a modest improvement to its business profile, although
should not alter financial metrics expected for the rating, S&P said.
The drawback of CEDC's revenue concentration is partially mitigated by its
nationwide distribution network and its position as the largest vodka producer
in Poland, the ratings agency said.
TFN.newsdesk@thomson.com
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