Fitch Ratings said April 29 that the recently announcedUS$1.5 billion saleof Anglo AmericanPlc's niobium and phosphates businesses in Brazil to a subsidiaryof China Molybdenum Co.Ltd. is a positive step for the diversified miner's .
According to the rating agency, the Brazilian assets fetcheda better price than it had expected, but since the niobium and phosphatesassets are among Anglo American's most profitable projects, further asset saleswill be more difficult and are likely to be at a much lower multiple sinceseveral remaining noncore assets that are for sale are either loss-making oronly marginally profitable.
"We therefore continue to expect further disposals tobe at multiples of less than 4x EBITDA, in contrast to the roughly 10x multiplefor the sale to China Molybdenum," the agency added, noting that given thenumber of assets up for sale, the valuations for less competitive projects arelikely to be significantly lower.
Fitch downgraded Anglo American's long-term issuer and seniorunsecured rating to BB+ from BBB- with a negative outlook following theannouncement of the miner's restructuring plan in February, which will see thesale of about 25 assets, leaving Anglo American as a materially smaller miningcompany focused on diamonds, copper and platinum.
The outlook for the miner may be revised to stable once itcompletes the planned disposals, coupled with debt reduction, but if AngloAmerican is unable to complete its asset sales, Fitch said its rating could befurther downgraded.