S&P Rating Action One Notch Down for Barry Callebaut
29 Mar 2013 --- Barry Callebaut, the world's leading manufacturer of high-quality cocoa and chocolate products, announced today that Standard & Poor's Rating Services (S&P) assigned a 'BB+' corporate rating to Barry Callebaut AG, down from BBB-.
The rating outlook is negative. At the same time, the rating on the senior unsecured notes is 'BB+' in line with the corporate credit rating.
According to Standard & Poor's, the downgrade reflects that the acquisition of Singapore-based Petra Foods Ltd.'s Cocoa Ingredients Division indicates a more aggressive financial policy than anticipated.
On April 22 2013, Barry Callebaut will propose at an Extraordinary General Meeting of Shareholders to finance the acquisition through a combination of new equity for an equivalent amount of USD 300 million and a USD 600 million Rule 144A/Reg S USD bond offering.
Victor Balli, CFO of Barry Callebaut, said: "After achieving investment grade a bit more than one year ago, we expected and communicated in December 2012 a potential downgrade based on the acquisition of Petra Foods' Cocoa Ingredients Division and related rating metrics. We are convinced of the strategic long-term value of this important strategic acquisition and, based on our long-term strategy, we will continue to invest in future growth. Despite such investments might temporarily affect our profitability, balance sheet ratios and cash generation, we are fully committed to go back to investment grade within the next few years."
