Fitch cuts Invictus Media

Fitch Ratings said it downgraded Invictus Media SAU's (Imagina) long-term issuer default ratings to C from CC. Fitch lowered Imagina's first-lien senior secured instrument rating to CC from CCC-.

The downgrade follows the announcement this week that Imagina agreed to a €620 million recapitalization, Fitch said. The recapitalization includes an initial €150 million equity injection by all shareholders followed by a future capital injection of €470 million by majority shareholder Orient Hontai Capital.

“The new equity injection would be a positive development for the company and its creditors in resolving its current liquidity difficulties,” the agency said in a press release.

The shareholder proposals depend on creditor approval.

“We believe that the proposals, while still under negotiation, will require some form of material change in terms that would constitute a distressed debt exchange (DDE), according to our criteria. The downgrade to C is a procedural step in our rating process. We expect the company's new capital structure to be re-rated to a higher rating level once this equity injection is completed,” Fitch said in a press release.

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