Fitch revises Braskem view to negative

Fitch Ratings said it revised the outlook Braskem SA’s long-term foreign- and local-currency issuer default ratings to negative from stable and affirmed the ratings at BBB-. It also affirmed the national scale rating at AAA(bra). The outlook for the national scale rating remains stable.

“The negative outlook incorporates Braskem SA's elevated vulnerability to a prolonged downturn in the petrochemical sector, which could result in a material increase in net debt due to negative FCF after disbursements related to the geological event in Alagoas. Despite the pressure on capital structure, financial flexibility remains adequate with a well-distributed maturity profile and a substantial cash position to support the business during the downturn,” Fitch said in a press release.

The agency said it projects Braskem’s free cash flow to be negative R$4.5 billion in 2023 and negative R$3.5 billion in 2024 but sees it turning positive at R$1 billion.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.