S&P: Grupo Famsa on watch

S&P said it placed the B global and mxBBB- national scale ratings on Grupo Famsa, SAB de CV on CreditWatch with negative implications.

The negative watch reflects concerns regarding Grupo Famsa’s corporate governance, particularly its risk management standards and internal controls, S&P said.

This opinion follows news that the issuer created Ps. 5.09 billion reserves to cover overdue receivables, the agency said.

Although the creation of the reserves does not have an immediate impact on the company’s aggressive financial risk profile, this does signal weakness of management and governance, S&P explained.

The company’s controlling shareholder provided an unconditional guarantee to bring comfort to stakeholders, but this could constrain the company's access to external funding and further weaken its liquidity, which is already assessed at less than adequate, the agency added.

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