Fitch Ratings has downgraded Sifco S.A.'s (Sifco) foreign currency and local currency Issuer Default Ratings (IDR) to 'D' from 'B-' and the National long-term rating to 'D(bra)' from 'BB(bra)'. Fitch has also downgraded the rating for the USD75 million senior unsecured notes due 2016 to 'C/RR4' from 'B-/RR4'.
KEY RATING DRIVERS
These rating actions follow Sifco's announcement that it has today filed for bankruptcy protection in Brazil. This announcement will result in payment default on some or all of Sifco's debt and result in a debt renegotiation.
Sifco had BRL105 million of cash and cash equivalents as of Sept. 30, 2013, compared with BRL750 million of total debt, including refinanced taxes. Of this total, approximately BRL297 million was short-term debt. The company's short-term assets included BRL100 million of inventories and BRL135 million of account receivables. The company's long-term assets included BRL609 million of net PPE, which primarily consists of its auto parts manufacturing facilities in Brazil and assembly lines in the U.S.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Corporate Rating Methodology' (Aug.5, 2013);
--'National Scale Ratings Criteria' (Oct. 31, 2013).
Applicable Criteria and Related Research:
Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715139
National Scale Ratings Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720082
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=827561
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
Contacts:
Primary Analyst
Renato Donatti, +55-11-4504-2215
Associate
Director
Fitch Ratings Brasil Ltda
Alameda Santos, 700 - 7
andar, Sao Paulo, sp CEP 01418-100
or
Secondary Analyst
Alexandre
Garcia, +55-11-4504-2616
Associate Director
or
Committee
Chairperson
Ricardo Carvalho, +55-21-4503-2627
Senior Director
or
Media
Relations
Brian Bertsch, +1-212-908-0549 (New York)
brian.bertsch@fitchratings.com