Allied Domecq Plc's Ratings Affirmed At `BBB+/F2'.Business Editors & Analysts LONDON--(BUSINESS WIRE)--Dec. 14, 2000 Fitch, the international rating agency, has affirmed the senior unsecured and short-term ratings of Allied Domecq Allied Domecq PLC was an international company, headquartered in Bristol, UK that operated spirits, wine, and quick service restaurant businesses. History Allied Domecq was the result of a 1994 merger between Allied Lyons and Pedro Domecq.[1]. plc (`Allied') at `BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. +' and 'F2' respectively, following yesterday's announcements that it had not submitted a bid for the Seagram Wines and Spirit business and had agreed to buy two champagne companies. The Rating Outlook remains Positive. Allied has been reviewing its competitive position in certain key spirits categories. In October the group announced that it had concluded a strategic alliance with Destileria Serralles regarding Seagram's Captain Morgan Captain Morgan is a brand of rum produced by Diageo. It is named after the 17th-century Caribbean privateer from Wales, Sir Henry Morgan. Captain Morgan's slogan is "Got a little Captain in You?" History rum brand. Destileria Serralles, which is reported to have a right of first refusal Right of First Refusal In general, the right of a person or company to purchase something before the offering is made available to others. Notes: For example, a football team may have the right of first refusal on a player's contract. over any transfer of the Captain Morgan brand, has agreed to an option to transfer the brand to Allied when the Seagram sale is completed. In Fitch's view, it is likely that the eventual purchaser of Seagram's portfolio will challenge this agreement. In November Allied won the rights to distribute Stolichnaya vodka in the U.S. Allied will also take assignment of the relevant trademarks and be responsible for the marketing and development of the brand, which fills an important gap in Allied's product portfolio. The contract, which runs for an initial 10 years, also grants Allied first refusal for both renewal and access to other markets as they become available. Fitch regards these two deals as significant steps in improving Allied's competitive position as they bring strong vodka and brown rum brands into the group's global spirits portfolio. Yesterday, Allied separately announced that it had agreed to buy GH Mumm & Cie and Champagne Perrier-Jouet from Hicks Hicks , Edward 1780-1849. American painter of primitive works, notably The Peaceable Kingdom, of which nearly 100 versions exist. , Muse, Tate & Furst for EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 575 million on a debt-free basis. Allied estimates that the full year EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become contribution will be some EUR55 million. Although the champagne purchases increase pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma leverage, as measured by net debt/EBITDA, from 2.7x to 3.2x, Fitch views the withdrawal from the Seagram drinks auction as positive from a credit perspective because the majority of a successful bid would probably have been debt-funded. Moreover, the three transactions referred to above are in line with the group's strategy of focusing on high growth global spirit and wine brands, and carry considerably less integration risk than would have been entailed by a bid for Seagram's entire portfolio. The management team continues to deliver improving results. Coupled with the improvements in the strategic composition of the drinks portfolio, this causes the Rating Outlook to remain Positive, despite the increase in leverage. |
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