S&P puts Mayne Group on positive watch

Standard &Poor's said it placed its BB corporate credit rating and debt issue ratings on Mayne Group Ltd. on CreditWatch with positive implications. The ratings action includes Mayne's corporate credit rating, raised to BB/Watch Positive/ from BB/developing, and senior unsecured debt, lifted to BB/Watch Positive from BB/developing.

The action follows the lodgment of the company's scheme booklet for consideration by shareholders. A positive shareholder vote Nov. 16 and approval by the Supreme Court of Victoria on Nov. 18 will be required to implement the demerger of the company's global pharmaceutical business and its domestic healthcare businesses, S&P said.

S&P said it has reviewed the structure of the domestic healthcare business and should the demerger proceed based on certain assumptions, the credit rating on the Australian healthcare business will be BBB-.

The outlook will be negative reflecting the challenges of improving profitability and reducing debt, S&P said.

At the time of the demerger, the domestic healthcare business will change its name to Symbion Health Ltd. The global pharmaceutical business will not be rated.

The demerged healthcare business, Symbion Health, will have sound market positions, particularly in pathology and diagnostic imagining, S&P said. Although the demerger reduces diversity, the spin-off will increase the proportion of stable cash flows, S&P said.

However, while the company has leading market positions, it generates weaker operating margins and profitability than its peers and faces challenges in improving these measures, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.