In addition to the recently announced sale, ACP also previously agreed to sell a stake of
The expected proceeds (
In Fitch's view, even though the repayment risk of ACP's current debt has been reduced by the cash to be received, ACP's ratings ('B'/Outlook Negative) still reflect limited ability to generate a well-balanced and sustainable cash flow to service its current obligations and to cover its current level of operating expenses. Once the transaction is completed, the company's liabilities will be eliminated, but its ability to generate enough cash flow to fulfill its cash needs over the medium term will be lower. Fitch will re-assess ACP's ratings at that time and will also consider the final composition of ACP's investment portfolio in terms of diversification, ownership and structure.
For BCP this transaction will further strengthen its already dominant position in the Peruvian market, giving it the highest market share and the strongest franchise in a fiercely competitive segment. Once the regulatory approvals are secured and the transaction closed, Mibanco/Edyficar will have a 19.5% market share. The relatively modest multiple paid for the acquisition and small size of the transaction should have a negligible impact on BCP's financial standing while providing an interesting upside in the microfinance sector over the medium term.
Additional information is available at 'www.fitchratings.com'.
Source: Fitch Ratings
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