S&P shifts KIO outlook to positive

S&P said it revised the outlook for Sixsigma Networks Mexico SA de CV (KIO Networks) to positive, affirmed its B ratings and removed them from CreditWatch, where they were placed with positive implications on Aug. 2.

The rating actions follow I Squared Capital acquiring the company in November.

“ISQ's strategy to reduce short-term debt will reduce refinancing risks for KIO Networks. Since closing the transaction on Nov. 26, 2021, ISQ's strategy has focused on reducing KIO Networks' liquidity exposure and improving the capital structure. We believe that the company's liquidity risks were materially reduced through the new owner's equity injections during fourth-quarter 2021 and first-quarter 2022. This translated into the amortization of most of the outstanding Mexican peso Ps. 3.2 billion in short-term debt as of Sept. 30, 2021, and a reduction in working capital outflows,” S&P said in a press release.

The agency said it expects KIO to employ its cash flows to boost capital expenditures to expand its data center business segment.

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