(The following statement was released by the rating agency)
Jan 10 -
Summary analysis -- CIR-Compagnie Industriali Riunite SpA --------- 10-Jan-2013
CREDIT RATING: BB/Stable/B Country: Italy
Primary SIC: PRINTING AND
Credit Rating History:
Local currency Foreign currency
19-May-2009 BB/B BB/B
06-Oct-2008 BB+/B BB+/B
The ratings on Italy-based operating holding company CIR-Compagnie Industriali Riunite SpA (CIR) reflect Standard & Poor’s Ratings Services’ assessments of the company’s business risk profile as “weak,” and its financial risk profile as “intermediate.”
The ratings are primarily constrained by the high exposure of CIR’s portfolio companies to the Republic of Italy (unsolicited BBB+/Negative/A-2) and some asset concentration on the 53%-owned Italian power utility Sorgenia (not rated), which has high debt leverage and heavy investments, with associated execution risks. Also weighing on the ratings are the inherent challenges that CIR’s shareholdings--Gruppo Editoriale L‘Espresso SpA (BB/Negative/--) and Sogefi (not rated)--face in their respective media and automotive parts sectors.
We estimate that CIR’s asset portfolio has limited liquidity, because a large portion, representing well above a half of total assets, is unlisted. In addition, we consider the company’s majority stakes in L‘Espresso and Sogefi as less tradable than smaller equity ownerships. In our opinion, management’s entrepreneurial philosophy and occasional appetite for strategic investments in unproven or not yet stabilized businesses may be a potential credit negative, although the generally low initial amounts CIR invests restricts the ultimate risks.