Fitch slices Accell

Fitch Ratings said it downgraded Sprint BidCo BV's (Accell Group) long-term issuer default and senior secured ratings to CCC from B-.

“The downgrade reflects our expectation that the group's EBITDA margin will drop to low single digits in 2023-2024 because of excess inventory stock in the market and weaker consumer demand, which together with high competition will lead to a deeper discount environment for a longer period than we previously assumed. This translates into a high working capital requirement at end-2023 leading to eroded liquidity headroom and negative free cash flow (FCF) for the year,” Fitch said in a press release.

The agency said it considers Accell’s capital structure unsustainable. It estimates the company’s EBITDA net leverage to remain at double digits and EBITDA interest cover below 1x until 2025.

However, Fitch said it expects a gradual recovery in 2025 with EBITDA recovering toward €110 million.

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