S&P: New Reclamation unaffected

Standard & Poor's said ratings and outlook on New Reclamation Group (Pty) Ltd. (B+/stable) are not affected by the announcement that the South African Competition Commission has levied a ZAR 146 million fine for violation of competition law.

The company's performance was satisfactory during the 12 months to Dec. 31, supported by generally healthy demand for scrap in South Africa and export markets, according to S&P.

Despite the fine, the agency said it expects leverage to remain within guidance for the ratings, with funds from operations to adjusted debt of 15% to 20% over the cycle. Nevertheless, while the fine can be paid over two years, there continues to be significant volatility in working capital, which could consume cash flows and put pressure on liquidity, S&P noted.

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