S&P: Saur group still on negative watch

Standard & Poor's said that its BB long-term corporate credit ratings on FG4 SA and Saur SAS, which are respectively the finance subsidiary and the main operating company of the Saur water and waste management group, remained on CreditWatch with negative implications, where they were placed in December.

This follows news that a consortium has entered into exclusive negotiations to acquire 100% of the Saur group. Assuming this acquisition goes through, in order to resolve the CreditWatch, S&P said it will focus on the new owners' strategy for the group, the group's leverage and the structure of this debt.

The current ratings reflect the group's leveraged financial profile and constrained financial flexibility, following its leverage buyout in 2005, S&P said.

These factors are offset by the group's strong operating performance (with EBITDA up 14% in the nine months to December 2006) and well-established position in the stable French water management market, the agency added.

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