Moody’s assigns B1 ratings to Frigoglass; stable outlook

Moody's Investors Service has assigned a first-time provisional (P)B1 corporate family rating (CFR) and B1-PD probability of default rating (PDR) to Frigoglass S.A.I.C., one of the world's leading manufacturer of beverage coolers and one of the largest glass bottle manufacturers in West Africa and the Middle East.
Concurrently, Moody's has also assigned a provisional (P)B1 senior unsecured rating to the group's proposed issue of EUR 250 mln of senior unsecured notes due 2018. The outlook on all ratings is stable.
"The ratings recognises the group's global presence and its long-term relationships with customers including the largest Coca-Cola bottlers and some of the largest beer producers in the world," said Paolo Leschiutta, Moody's lead analyst for Frigoglass.
"These strengths compensate for Frigoglass's modest size overall — approximately EUR 581 mln in revenues as at year-end 2012 — in comparison to its much larger customer base, and a degree of customer concentration, as Coca-Cola Hellenic (CCHBC, Baa1 negative) accounts for 25% of the group's revenues," added Leschiutta.
The rating is also supported by the dominant position of Frigoglass in most of its markets, particularly in emerging markets.
Incorporated in Greece, Frigoglass produces beverage refrigerators (or iced-cold merchandiser) for global players in the beverage industry, with key customers including Coca-Cola Company bottlers, major brewers, Pepsi and dairy companies. Truad Verwaltungs A.G., a trust controlled by the Leventis family, owns 45% of the shares and is a long-term investor in the group.
Frigoglass was part of CCHBC group until 1996 and has retained strong ties with the group since then. While Moody's recognises Frigoglass's success in recent years in increasing its customer diversification, the group is likely to have weak negotiating power with most of its customers and remains exposed to raw material price volatility, which could affect its profitability going forward, Moody’s added.