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Fitch Downgrades Astaldi to 'C' on Creditor Protection Application.

London: Fitch Ratings has downgraded Astaldi S.p.A. to 'C' from 'CCC-' and removed it from Rating Watch Evolving.

The downgrade reflects that Astaldi had filed for creditor protection as a going concern under Italian insolvency law. The company has entered into a standstill agreement whereby creditors are prohibited from starting or continuing enforcement or foreclosure proceedings over Astaldi's debt. The arrangement will give Astaldi time to restructure its obligations.


Filed for Creditor Protection: On 28 September 2018, Astaldi filed for creditor protection under Italian insolvency law as a going concern, on the basis that it does not have binding offers for the sale of its share of the third Bosphorus Bridge. As equity funding was conditional on this agreement, Astaldi has announced that the pre-existing 2018-2022 plan is no longer deliverable. In addition, contract start-ups, and thus advance payments, have been delayed, forcing the company to seek protection.

The creditor protection means that Astaldi enters into a standstill period with its creditors, and creditors will not have the ability to start or continue enforcement or foreclose on Astaldi's assets. This gives Astaldi time to propose a capital restructuring (a pre-bankruptcy composition), which will need to be approved by the creditors and the courts.

Super Senior Tranche May Affect Recoveries: Astaldi's preliminary restructuring is likely to add super senior debt to its capital structure, which could lead to subordination of the existing senior unsecured debt. Furthermore, the additional debt could reduce recoveries for senior unsecured lenders.

High Leverage: Astaldi's leverage remained high at over 10x in 2016-2017 on a funds from operations (FFO) net basis. Overall debt had increased to EUR2.6 billion at end-2017 from EUR2.3 billion a year earlier, mainly due to the outflow of the working capital that was needed to finish the outstanding projects. The company planned to repay a large portion of debt in 2018 from the proceeds from divestments and the proposed equity issuance, which had been already agreed with the main investors. The proceeds were to be used for debt repayment.


The 'C' IDR reflects the fact that Astaldi is entering into a standstill agreement.


Future developments that may, individually or collectively, lead to positive rating action include:

- Positive rating action is highly unlikely given the current situation. Nevertheless, if Astaldi is successful in its financial restructuring, a more sustainable capital structure and liquidity profile would be positive for the ratings.

Future developments that may, individually or collectively, lead to negative rating action include:

- Uncured payment default.

- Entering into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure or the occurrence of a distressed debt exchange.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Jan 9, 2019
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