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Fitch: Fibria unchanged
Fitch Ratings left Fibria Celulose SA's BB+ issuer default rating and stable outlook unchanged following the company's announcement that it will sell about $303 million of assets. The sale is part of the company's deleveraging efforts and a result of weak free cash flow generation, the agency said.
Fitch is negative regarding the debt-reduction prospects of Latin American pulp, paper and forest products companies in the near to medium term. The agency expects free cash flow to continue to be pressured in 2013 as additional pulp capacity enters the market. Additional challenges for the industry include the anemic U.S. economy, weak demand for paper in Europe due to the crisis, secular changes and slower growth rates in emerging markets, Fitch said.
Management teams will need to seek alternative avenues for deleveraging, including the sale of assets, in order to avoid negative rating actions in this environment, the agency said.
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