Fitch puts Invensys on positive watch

Fitch Ratings said it placed the ratings of Invensys plc and Invensys International Holdings Ltd. on Rating Watch positive following the company's agreement to sell its process equipment and automation solutions business APV to SPX Corp. for cash proceeds of £250 million, subject to regulatory approval.

Ratings on watch include Invensys' BB- long-term issuer default rating and B+ senior unsecured notes and Invensys International's BB- long-term issuer default rating and BB+ senior secured rating.

The agency said the positive watch reflects the sale of APV, which is a low margin business (5.5% reported EBITDA margin against around 12% for the group), and the application of the proceeds to debt prepayment, including an additional contribution of around £80 million to the company's U.K. and U.S. pension schemes. The adjusted net debt-to-EBITDAR ratio - which fell to 1.5x at March 2007 from 4.4x at March 2006 and from 3.7x at March 2005 - is expected to further improve.

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