Fitch puts Amanco on negative watch

Fitch Ratings said it placed Amanco Holding Inc. y Subsidiarias' BBB- foreign- and local-currency issuer default ratings and AA+(pan) national long term rating on Rating Watch negative.

On Feb. 22, Mexichem, SA de CV announced that it signed a contract with Amanco's controlling shareholder, Grupo Nueva, to acquire 100% of Amanco's shares. The agency said the Rating Watch placement reflects uncertainty regarding possible direct and/or indirect leveraging affects of the acquisition on Amanco and that the ultimate rating action will depend largely on the financial and business strategies of the new combined entity.

Positively, Fitch said the acquisition will create competitive advantages for Amanco in vertical integration and raw material sourcing, as Mexichem is the largest producer in Latin America of polyvinylchloride resins used to manufacture Amanco's pipe systems. Including Amanco and the recently announced acquisition of Petroquimica Colombiana, SA, Mexichem's revenues and EBITDA should reach approximately $2.5 billion and $340 million, respectively.

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