June 28, 2017 / 4:35 PM / 24 days ago

Fitch: Gruma's Ratings Unchanged by Offer to Purchase GIMSA Shares

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(The following statement was released by the rating agency) MONTERREY, June 28 (Fitch) Fitch Ratings says there is no rating impact from Gruma, S.A.B. de C.V.'s (Gruma) announcement of a pending acquisition deal with its subsidiary Grupo Industrial Maseca, S.A.B. de C.V. (GIMSA). Gruma recently launched a public offer to acquire up to 14.5% equity stake of GIMSA. The amount of the transaction is estimated at MXN3.3 billion and will be financed with an unsecured committed revolving credit facility for up to USD250 million maturing in 2022. Fitch believes this acquisition is manageable for Gruma's credit profile. Its total debt/EBITDA and net debt/EBITDA, including the acquisition, are estimated by Fitch to increase to 1.6x and 1.2x, respectively, by year end 2017. These leverage metrics are in line with the company's current 'BBB' rating level and are within the range previously expected by Fitch. For the LTM ended March 31, 2017, Gruma's total debt/EBITDA and total net debt/EBITDA calculated by Fitch were 1.2x and 0.9x, respectively. Fitch also views the acquisition as positive for the company as it will have full control of the operating cash flow coming from this subsidiary and will eliminate the dividend leakage to minority shareholders. GIMSA's revenue and EBITDA represents around 26% and 27%, respectively, of its consolidated figures. Gruma's ratings reflect its solid business position as one of the largest producers of corn and flour tortillas in the world with operations in USA, Mexico, Europe, Central America, Asia and Oceania. Its ratings also incorporate the company's good operating performance, solid free cash flow (FCF) generation and sound financial position. The ratings are tempered by the exposure to the volatility in prices of its main raw material (corn) and currency fluctuations. Fitch currently rates Gruma as follows: --Long-Term Foreign Currency Issuer Default Rating (IDR) 'BBB'; --Long-Term Local Currency IDR 'BBB'; --USD400 million senior unsecured notes due 2024 'BBB'. Contact: Rogelio Gonzalez Director +52 8399 9100 Fitch Mexico S.A. de C.V. Prol. Alfonso Reyes 2612 Monterrey, N.L., Mexico Secondary Analyst Johnny Da Silva Director +1-212-908-0367 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. 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