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S&P reviews Hypermarcas
Standard & Poor's said it placed its BB global and brAA- national scale ratings on Hypermarcas SA on CreditWatch with positive implications.
The CreditWatch positive listing follows the recent announcement of the sale of Hypermarcas' cosmetics business to Coty Inc. (BB+[Prelim]/stable/--) for R$3.8 billion, which should be received by the second quarter of 2016.
Hypermarcas will use the proceeds from the sale primarily for deleveraging, which will reduce interest burden, bolstering cash flow generation.
However, S&P said it still needs to reassess company's long-term financial policies and growth strategy, as well as the expected leverage levels for the coming years, although it expects them to be materially lower than current levels.
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