S&P revises Tupy view to positive

S&P said it changed Tupy SA’s outlook to positive from stable and affirmed its BB ratings. The agency also affirmed the brAAA Brazilian rating and left the debt’s recovery rating at 3 (65%).

Tupy plans to acquire Teksid's Brazilian and Portuguese cast iron components operations from Stellantis NV for an enterprise value of €67.5 million.

“The final transaction has a more limited scope than the original terms announced in December 2019, following adverse reviews by the U.S. antitrust authorities related to the Mexican operations. The company then decided to reduce the scope, also leaving Teksid's operations in Poland and China and other commercial offices out of the transaction. Still, the two acquired plants in Brazil and Portugal will increase Tupy's installed capacity by about 40%,” S&P said in a press release.

The agency said it projects Tupy to post gross debt to EBITDA at 2x-2.5x and net debt to EBITDA below 1x in 2022, given a full year of the consolidated assets and only minor synergies in the first year.

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