Fitch cuts Anglo to junk

IOL pic dec9 Anglo 2071 INDEPENDENT MEDIA File picture: Supplied

Johannesburg - Anglo American’s credit assessment was cut to junk with a negative outlook by Fitch Ratings as the miner looks to reduce its asset base and trim debt amid a commodity-price rout.

The company’s rating was reduced to BB+ from BBB-, Fitch said in a statement Wednesday. The miner is trying to engineer a turnaround focusing on its best mines that produce diamonds, platinum and copper, while shunning bulk commodities.

Anglo, with mines around the world producing everything from diamonds to iron ore and nickel, lost three-quarters of its market value last year as metal prices sank to a six-year low.

Its credit rating was cut to junk on February 15 by Moody’s Investors Service, which said the company will have a harder time paying down debt given the ongoing slide in raw materials.

Read also: Kumba’s path from Anglo darling to reject

“The negative outlook primarily reflects the high level of uncertainty regarding the ultimate success of the group’s restructuring plan,” Fitch said.

With several of Anglo’s available assets being marginally profitable or loss-making, “this raises the question of whether they will attract a purchase multiple that is acceptable” to its management, it said.

Read also: Anglo in dramatic portfolio shake-up

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