Fitch assigns Amara B, notes B+

Fitch Ratings said it assigned Green Bidco, SAU (Amara) a first-time expected long-term issuer default rating of B with a positive outlook. The agency also gave Amara's upcoming sale of €270 million of notes an expected B+ senior secured rating with an RR3 recovery rating

“The IDR is constrained by Amara's small scale and its intermediary position in the value chain, fairly concentrated customer and supplier diversification, and historically negative free cash flow (FCF) generation. Rating strengths are its leading market position in the distribution market for energy-transition products, primarily in Spain, its long-term partnership with customers, and a favorable market environment,” the agency said in a press release.

Nearly 70% of its revenue comes from the renewables end-market (primarily solar energy) and 27% to electrification. “It benefits from rising demand for green energy, which supported its sharp revenue growth in 2022. We forecast a further double-digit revenue increase in 2023 and sustainable revenue generation above €800 million over 2023-2026, underpinned by strong underlying demand for its distributed products,” Fitch said.

Fitch said it sees good operating performance with widening EBITDA margins, FCF generation and leverage metrics, plus good liquidity following its acquisition by Cinven.

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