Fitch Ratings has upgraded
The upgrade reflects AG's financial profile after the debt restructuring execution. Fitch has subsequently withdrawn the ratings for commercial purposes.
Fitch has also withdrawn the 'C'/RR5' ratings on AG's
The ratings are being withdrawn for commercial reasons.
Key Rating Drivers
The upgrade to 'CCC-' reflects AG's high leverage and weak financial flexibility, with EBITDA to Interest expense estimated to average 2.4x during 2021-2022, post debt restructuring execution. The company managed to reduce total debt by
On
As a consequence of its debt restructuring, AG extinguished / liquidated its current debt until the beginning of the process, for a total amount of
AG has an ESG Relevance Score of '5' for Management Strategy. AG also has an ESG Relevance Score of '5' for Group Structure. Both the ESG Relevance Score of '5' for Management Strategy and Governance Structure have resulted in the company entering into a debt restructuring process for a third time during the last five years.
Derivation Summary
Post debt restructuring, AG still exhibits high leverage, negative FCF generation and tight financial flexibility. AG benefits from its exclusive agreement to distribute
Fitch does not rate any direct peers for the company. AG's closest peers in other sectors include Brazilian fleet and car rental industry leaders, Localiza Rent a
Key Assumptions
Fitch's Key Assumptions Within Our Rating Case for the Issuer:
Gradual recovery in AG's operational performance, with revenue and EBITDA trending to levels around
Net debt to EBITDA ratio trending to levels around 6x by YE2022.
Interest coverage trending to levels around 1.7x by YE2022.
RATING SENSITIVITIES
Rating sensitivities do not apply as Fitch has withdrawn the ratings.
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 '
Issuer Profile
AG's company headquarters are located in
ESG Considerations
AG has an ESG Relevance Score of '5' for Management Strategy due to its track record of recurring operational and debt restructuring processes during the past years, due to challenges the company has faced in implementing its strategy and maintaining competitive positions within its key markets. AG's below-average execution of its strategy has contributed to a materially weaker operational performance and unsustainable capital structure.
AG also has an ESG Relevance Score of '5' for Group Structure due to its track record of the strong influence on AG's owners on its management, which has resulted in decisions related to the company's operational and financial strategies that have been made to the detriment of its creditors.
Both the ESG Relevance Score of '5' for Management Strategy and Governance Structure have resulted in the company entering into a debt restructuring process for a third time during the last five years.
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.
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.
RATING ACTIONSENTITY/DEBT RATING PRIOR
Automotores Gildemeister S.p.A . LT IDR CCC- Upgrade D
LT IDR WD Withdrawn D
LC LT IDR CCC- Upgrade D
LC LT IDR WD Withdrawn D
senior secured
LT WD Withdrawn C
VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
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