Moody's has lowered the credit rating of OHL by one notch, from 'B3' to 'Caa1', which sinks the 'rating' of the construction company within the speculative grade, which is considered a 'junk bond', according to the company.
The agency attributes this reduction to"poor results" presented by OHLat the end of the first nine months, which resulted in a loss of 1,335 million euros, and the worsening profitability of its builder business.
Moody's also points out the "unexpected" consumption of resources that the entire group's business, and not only the failed projects, registered in this period, which has led to the "strong" liquidity situation it achieved with the sale of itsconcessions divisionhas already been "quickly" reduced.
In addition, the firm predicts that the construction generation of the construction company will remain negative next year. "The possibility that cash generation will improve in the coming quarters is still very limited," Moody's says in its report.
Moody's, although it leaves its new note to OHL with a stable outlook, conditions a rise in the rating to an improvement in the margins and the cash generation of the builder business, and to the company maintaining its liquidity at an "adequate level". On the other hand, it warns that it will lower it if this liquidity continues to weaken and the company continues to "burn" resources.
Moody's rating down takes place after thecollapse that OHL has registered on the stock market, where the construction company accumulates a decrease of 86% so far this year, which has led it to lose the level of the euro per share and delve into new historical lows.
In the day of this Friday, the decision of the agency stopped the rebound that the titles of OHL were experiencing, so that they settled the session with a decrease of 0.98%, against the increases of up to 6.5% that they came to score during the negotiation.
Moody's is the rating agency thatdown on three occasions the OHL note in the second half of 2016,before the problems of indebtedness that then presented the company.
OHL launched in that 'annus horribilis' a plan of sanitation and adjustment that is still underway. By virtue of this plan, the company has been carrying out a cascade of sales of assets and businesses that reached its climax at the beginning of this year with the divestment of the concessions business. After this operation, it was converted into a construction company and Moody's upgraded the position.
Negotiation with banks
Currently, afterchange four times as CEO, the new management of the company led by delegate José Antonio Fernández Gallar has carried out a thorough review of the group's portfolio of contracts, identifying projects that have no possibility of realization, which has led to computing new losses.
Given this new reduction of Moody's, OHL highlights its"comfortable liquidity position" of 1,046 million,which gives it a cash position of 345 million.
However, sources of the company reported that it has opened a negotiation with banks "to continue guaranteeing guarantees and credit lines in the construction business".
Thesignature presided by Juan Villar Mirconsiders its cash position gives it the "necessary stability" so that its new management team executes its business plan to return the company to "profitability and cash generation in the horizon of 2020" and thus "ensure its viability future. "