Fitch rates Mobilux IDR B, notes B+

Fitch Ratings said it assigned Mobilux 2 SAS, the new holding company of BUT SAS, an expected issuer default rating of B(EXP) with a stable outlook.

Mobilux 2 SAS will absorb BUT's existing holding company Decomeubles Partners SAS (B-/Rating Watch Positive) as part of BUT's acquisition by private equity firm Clayton, Dubilier & Rice (50% ownership) and WM Holding GmbH (50%), an Austrian incorporated investment company related to Austria-based XXXLutz KG (XXXLutz), the third-largest furniture retailer in Europe.

Fitch also assigned Mobilux Finance SAS' proposed €380 million senior secured notes due 2024 a B+(EXP)/RR3/52% expected rating. Mobilux Finance is the new debt-issuing entity set up as part of BUT acquisition.

Debt proceeds, together with existing cash and new equity provided by the new shareholders, will be used to redeem BUT SAS' existing €246 million senior secured notes.

On completion of the bond placement and repayment of the existing bond, the agency expects to upgrade the issuer default rating of Decomeubles Partners SAS to B and withdraw both this rating and the existing senior secured notes rating.

Fitch said Mobilux's B(EXP) issuer default rating reflects the expectation that the proposed capital structure backing Clayton, Dubilier’s and WM Holding's buyout provides a level of leverage and financial flexibility compatible with a B rating.

The rating also reflects BUT's business profile which, over the past few years, has been significantly improved by measures to enhance profitability and working-capital management.

Fitch said it believes the entry of WM Holding as a 50% shareholder further supports BUT's business profile, notably by enlarging the group's potential for profitability uplift and further improvement in working-capital management through a purchasing arrangements with XXXLutz.

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