S&P puts Elementia on watch

S&P said it placed the BB long-term issuer and issue-level credit ratings on Elementia, SA de CV on CreditWatch with negative implications.

Elementia recently announced that it intends to spin off its metal and building system divisions into a new independent company, S&P said.

The CreditWatch listing reflects the potential worsening of Elementia's business profile post spin-off due to its concentration in a single business segment and smaller scale, S&P said.

Elementia's new capital structure and liquidity after the spin-off is somewhat uncertain because of potential cross-guarantees on its debt, the agency said.

The company could face weaker leverage metrics under the announced spin-off, S&P added.

The transaction is still subject to approvals, the agency noted.

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