Moody's may upgrade OM Group

Moody's Investors Service said it affirmed OM Group Inc.'s B2 corporate family rating and B3 $400 million notes due 2011 and moved the outlook to under review for possible upgrade following the announcement that the company agreed to sell its the nickel business to Norilsk Nickel on a debt-free, cash-free basis for a cash purchase price of $408 million, subject to a post closing working capital adjustment. Additionally, OMG negotiated five supply agreements with the buyer for the supply of certain raw materials to its remaining cobalt-based Specialties business and nickel-based raw materials used in OMG's electronic chemicals business.

The agency said the transaction will take OMG out of the nickel business and represents a significant step in the firm's strategy of becoming a specialty chemicals and advanced materials company with less volatile earnings.

The review for a possible upgrade will consider the closing of the nickel business sale, the ultimate use of net sale proceeds and whether the firm's operating margins and cash flow continue to be supportive of a higher rating, Fitch 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.