Fitch places Fresenius Medical on watch

Fitch Ratings said it placed Fresenius Medical Care AG & Co. KGaA's ratings, including its BBB- long-term issuer default rating on rating watch negative.

“These actions follow Fresenius SE & Co. KGaA's (FSE; BBB-/negative) announcement of changing FMC's legal structure to an AG (German joint stock company) and removing its KGaA (partnership limited by shares) status. The legal change means that FSE would no longer have strategic control over FMC or consolidate FMC in its group accounts, and would manage it as a minority equity investment with its approximately 32% stake,” the agency said in a press release.

Fitch said it plans to lower FMC's IDR by one notch when the legal entity changes take effect.

“FMC's turnaround plan to reverse its deteriorating operating performance and weakening near-term credit prospects entails execution risks, and our rating case leaves little scope for lower-than-expected growth or profitability improvement,” the agency said.

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