Fitch: Minerva's Capital Injection Neutral to Company's Credit Quality

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings views a proposed capital increase to Minerva S.A. (Minerva) to be neutral for the company's credit profiles. If completed under current terms, the private equity fund Salic (UK) Ltd. (Salic UK) will subscribe and pay in new common shares to be issued by Minerva, corresponding to 19.95% of Minerva's total shares in a transaction valued at BRL746 million.

Fitch rates Minerva 'BB-' / 'A-(bra)' / Stable Outlook. A positive rating action continues to be based on additional geographic and protein diversification, recurring positive free cash flow generation, and substantial decreases in gross and net leverage to below 4x and 3x, respectively, on a sustained basis. As of Sept. 30, 2015, Minerva's net leverage was 4.8x; Fitch believes that pro forma for the transaction, Minerva will present a net leverage ratio of 3.4x by year-end 2015 and this metric will remain close to 3.5x during the expansion plan.

Fitch views this transaction as positive from a business perspective as it will provide Minerva with a healthier capital structure in the short term, enabling it to develop its strategy to grow and diversify geographically. We believe that as a result of this growth strategy, the company will continue to present a net debt-to-EBITDA ratio consistently above 3.0x.

Additional information is available at www.fitchratings.com

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Fitch Ratings
Primary Analyst
Johnny Da Silva
Director
+1-212-908-0367
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
Gisele Paolino
Director
+55 21 4503 2624
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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