Fitch Ratings has revised the Rating Watch on Melsta Regal Finance Ltd’s (MRF) National Long-Term Rating of ‘A+(lka)’ to evolving from negative.
The rating action follows the announcement dated April 2, 2018 that a consortium led by Fairfax Financial Holdings Limited of Canada (Fairfax) will acquire 100% of the equity in Sri Lanka-based MRF from its current parent, Melstacorp PLC (MC) for Rs 2.5 billion.
Fairfax will be the single largest shareholder of MRF after the completion of the transaction with effective control of 70% of the company via Bluestone1 (Private) Limited, a special purpose vehicle established for the acquisition of MRF.
MRF’s rating of ‘A+(lka)’ was driven by Fitch’s expectation of support from the Melstacorp group through parent MC. However, Fitch believes that support from MC can no longer be relied upon.
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