Fitch upgrades Emeco

Fitch Ratings said it upgraded Emeco Holdings Ltd.'s long-term issuer default rating to B- from CCC.

The outlook is stable.

The upgrades reflect a view that the mining services company's financial profile will continue to improve as it realizes benefits from its recently completed merger with Andy's Earthmovers (Asia Pacific) Pty Ltd. and Orionstone Holdings Pty Ltd., Fitch said.

Emeco's leverage is expected to improve to 4.2x by the end of the financial year to June 2021, from 11x at the end of fiscal 2017, the agency said.

The improvement will be driven by an expectation that EBITDA will increase, Fitch said, as well as the company's commitment to reduce its net debt-to-EBITDA ratio after it recently revised down its target for the ratio.

Emeco's operating utilization rate for its fleet continues to show signs of recovery as demand for rental equipment from miners improves and a strong pipeline of projects come to market, the agency explained.

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