Moody’s alters Archroma view to positive

Moody’s Investors Service said it revised its outlook for Archroma Holdings Sarl and Archroma Finance Sarl to positive from stable.

Archroma agreed to buy the textile effects business of Huntsman Corp. for about $590 million. Archroma will fund the purchase, pay related fees and expenses, repay the company's revolver borrowings and add cash to the balance sheet through the issuance of $600 million of third-party preferred equity certificates to be raised by SKES Investment 2, Sarl a holding company of Archroma, with the proceeds going into the bank restricted group and $100 million of new common equity.

The deal is expected to close around Dec. 31 subject to regulatory approval and customary closing conditions.

“Today's rating action reflects the expectation that upon closing of the acquisition, Archroma will have a broadened business profile and display credit metrics that could be commensurate with a higher rating category,” Moody’s said in a press release.

Concurrently, the agency affirmed the B2 ratings on the company and its bank facility.

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