S&P lowers Cimpor to 'BB'

S&P lowers Cimpor to 'BB'
Published: 27 June 2012


On June 26, 2012, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Cimpor to 'BB' from 'BBB-' and its short-term rating to 'B' from 'A-3'. The ratings remain on CreditWatch negative, where they were placed on April 3, 2012.

The downgrade follows the announcement and settlement of Brazilian holding company Camargo Correa’s SA (CCSA’s) successful takeover of Cimpor from the majority of existing shareholders. The Camargo group currently owns about 73% of Cimpor directly and, due to a joint shareholder agreement with Votorantim, has a total voting stake of 94.1%.

“ We are equalising the rating on Cimpor with that on its new parent Camargo, in line with our criteria on rating parents and their subsidiaries. This is because we assess CCSA as having weaker credit quality than Cimpor and believe that Cimpor will be fully incorporated into the Camargo's cement operations (Intercement). We believe this gives Camargo direct access to Cimpor's assets, along with control of cash and dividend payouts. It will also enable Camargo direct the group's future strategy,” S&P said in its report.