S&P slices Consolis

S&P said it downgraded its ratings for Consolis (Compact Bidco BV) and its debt to CCC- from CCC+.

Without outside financing, the agency said it sees limited liquidity for the company in 2024.

“We believe that Consolis has already reduced its capital expenditure (capex) and working capital position to minimum levels. We also note that Consolis' activity is seasonal and that the first three quarters of the year usually consume cash while the company collects cash in the last quarter of the year.

“We estimate the intra-year working capital peak to be about €40 million, during the third quarter. Considering that most of the RCF is drawn and the working capital seasonality, we believe that liquidity might become insufficient in the third quarter 2024, or in about six months, absent any external liquidity injection,” S&P said in a press release.

The company’s S&P Global Ratings-adjusted debt to EBITDA, including the payment-in-kind loan, is expected to cling above 10x in 2024. Additionally, the agency noted Consolis' €30 million term loan matures in May 2025 and will become short-term debt next month.

The outlook is negative.

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