S&P's Metso ratings unaffected

Standard & Poor's said its ratings and outlook on Metso Corp. (BB+/stable/B) remain unchanged following the group's announcement that it intends to acquire AkerKvaerner ASA's pulping and power business at a cost of €335 million and that it proposes to pay an extra dividend of about €100 million in 2006.

S&P said the acquisition would strengthen the Metso Paper division's positions in the supply of core processes for pulp mills, but would also be subject to integration risks, and although the acquisition and dividend payment would increase Metso's net debt levels, the financial profile is expected to remain in line with the ratings.

The agency said it expects funds from operations to lease and pension-adjusted net debt to average about 20% to 25% over a business cycle (it was about 50% in 2005).

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