S&P: Sanitec outlook stable

Standard & Poor's said it revised to stable from negative its outlook on Sanitec International SA, the holding company of the Finland-based Sanitec group, and Sanitec Oy, a subsidiary of Sanitec International, following improvements in its liquidity situation.

At the same time, the B+ long-term corporate credit ratings and all related debt ratings were affirmed.

"We believe that Sanitec is now likely to meet its financial covenants applying to €507 million of bank facilities, including the unused rollover backup, over the next few quarters," said S&P credit analyst Eve Greb. "The successful divestment of its vacuum sewage business (EVAC) to the French Zodiac Group by mid-April and improving free cash flow generation in the fourth quarter of 2003 due to working capital reduction have also helped Sanitec to alleviate some short-term liquidity pressure."

S&P said the ratings on Sanitec International SA continue to reflect the group's aggressive financial structure and average business profile, supported by its strong market positions in the bathroom ceramics market, good diversification across Europe, and the industry's high barriers to entry and exposure to the renovation market.

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