Analysts at ratings agency Standard & Poor’s have downgraded Unibail-Rodamco-Westfield after a €3.5bn (£3.1bn) equity raising was rejected by shareholders.
URW announced the fundraising in September as part of a broader strategic revamp, but the proposal was criticised by several shareholders, including former chief executive Léon Bressler, who argued it would be dilutive. The capita increase was rejected by shareholders this week, with Bressler and two members of his consortium now taking seats on URW’s supervisory board.
Downgrading the company’s issuer credit rating to BBB+ with a ‘negative’ outlook from A-, S&P said URW is now unlikely to restore its credit metrics to a level compatible with an A- rating, which would include debt to Ebitda below 13x.
“The negative outlook reflects our view of the pandemic’s long-lasting effects on the retail property sector, and that we could downgrade URW in case of stronger deteriorations in cash flow or asset values than we currently expect,” the agency said.
S&P added: “We also believe that the recent spat between management and two of the new board members highlights some potential strategic differences. As a result, we are lowering our assessment of URW’s governance and management to satisfactory, from strong.”
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