MUMBAI (Thomson Financial) - Fitch Ratings signalled it may upgrade Zinifex Ltd, after the merger proposal with Oxiana Ltd, whereby both companies will own 50 pct each of a new company yet to be named.
The agency placed Zinifex's 'BB+' long-term foreign currency issuer default rating (IDR) on rating watch positive, saying the rating watch is expected to be resolved within six months by which time the structure of the merged entity, including its debt structure, will be clearer.
'The diversification from Zinifex's historic narrow zinc and lead focus into copper, following the merger with Oxiana, is positive and follows the imminent acquisition of nickel producer, Allegiance Mining NL,' Fitch said.
'The merged entity will have a strong balance sheet and credit metrics which will allow it to expand and diversify further in a manner that is likely to remain favourable for its credit rating and outlook,' it added.
The merger between Zinifex -- the world's third-largest zinc producer -- and Oxiana will take place via a scheme of arrangement whereby Zinifex shareholders will receive 3.1931 Oxiana shares for each Zinifex share. TFN.newsdesk@thomson.com jro COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
The agency placed Zinifex's 'BB+' long-term foreign currency issuer default rating (IDR) on rating watch positive, saying the rating watch is expected to be resolved within six months by which time the structure of the merged entity, including its debt structure, will be clearer.
'The diversification from Zinifex's historic narrow zinc and lead focus into copper, following the merger with Oxiana, is positive and follows the imminent acquisition of nickel producer, Allegiance Mining NL,' Fitch said.
'The merged entity will have a strong balance sheet and credit metrics which will allow it to expand and diversify further in a manner that is likely to remain favourable for its credit rating and outlook,' it added.
The merger between Zinifex -- the world's third-largest zinc producer -- and Oxiana will take place via a scheme of arrangement whereby Zinifex shareholders will receive 3.1931 Oxiana shares for each Zinifex share. TFN.newsdesk@thomson.com jro COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.