Fitch Ratings has maintained
Fitch placed Bright Scholar on RWN in
Fitch has also simultaneously withdrawn the ratings due to commercial reasons. The agency will no longer provide ratings or analytical coverage of this issuer.
Key Rating Drivers
Diminished Scale, Lower Visibility: Fitch expects Bright Scholar to provide management services to affected schools after completion of disposal, which will offset some of the profit lost from discontinued operations. However, a prolonged delay or failure to complete the disposal would materially weaken the business profile as the remaining businesses are tiny and not cash generative.
We estimate the scale of Bright Scholar's normalised post-disposal EBITDA at
Adequate Liquidity: Fitch expects Bright Scholar should have sufficient liquidity for its ongoing operations in the near term, but further delays in the disposal could limit its cash generation. Bright Scholar is only entitled to collect service fees from affected schools upon completion of the disposal as collecting income from a related party for management services is not permitted under the latest rules, resulting in cash outflow at the listed company level since
RATING SENSITIVITIES
No longer relevant, as the rating has been withdrawn.
Best/Worst Case Rating Scenario
International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
Following the withdrawal of the ratings on Bright Scholar, Fitch will no longer be providing the associated ESG Relevance Scores.
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