S&P puts Seven & i on watch

S&P said it placed on CreditWatch with negative implications its credit ratings for Seven & i Holdings Co. Ltd., subsidiary Seven-Eleven Japan Co. Ltd. and subsidiary 7-Eleven Inc.

“We placed the ratings on CreditWatch in response to Seven & i’s announcement on Aug. 3, 2020, that it will acquire U.S.-based convenience store and gas station chain Speedway LLC from its U.S.-based parent, energy company Marathon Petroleum Corp., through 7-Eleven for $21 billion. If Seven & i finances the deal mostly with debt, the acquisition would substantially hurt its financial standing by a degree far outweighing the benefits its business franchise might gain,” S&P said in a press release.

The agency, however, said if the deal goes through as planned, the acquisition would be a positive factor in its assessment of Seven & i’s business.

“With EBITDA coming from Speedway acquisition of $1.5 billion, or about ¥160 billion, we believe it would make the company’s overseas convenience store operations into an earnings source comparable in terms of EBITDA to its Japanese convenience store operations,” S&P said.

© 2015 Prospect News.
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