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Investing.com -- Fitch Ratings has downgraded Sasa Polyester Sanayi Anonim Sirketi A.S. (SASA) to ’CCC’ from ’B-’ on Monday, citing increased refinancing risk and high debt burden.
The Turkish polyester manufacturer faces potential liquidity pressure due to the need to roll over a large portion of short-term debt and secure formal waivers on longer-term bank facilities. Fitch expects SASA to generate negative free cash flow from 2025 through 2027, driven by high interest costs, weak polyester market conditions, and global overcapacity.
According to Fitch, SASA’s EBITDA net leverage is projected to peak above 21x in 2025 before declining to high single digits by 2027. As of June 2025, the company had approximately $2.2 billion in short-term debt, with about $0.7 billion of longer-dated debt reclassified as short-term due to leverage exceeding covenants.
The company has reached an agreement in principle with lenders to waive the covenant, but Fitch expects the process will only be formalized by the end of 2025. SASA is exploring alternative funding options, including a potential convertible bond, which could help reduce short-term debt.
Fitch assessed SASA’s liquidity as weak, noting the company held only TRY3 billion in cash and cash equivalents as of June 2025, while facing large interest payments and dependence on rolling over short-term debt.
The rating agency also highlighted operational challenges, including technical problems at SASA’s newly completed purified terephthalic acid facility that impaired production in early 2025. These issues reduced output of final products, with EBITDA reaching only $64 million in the first half of 2025. While the technical issues have been resolved, SASA continues to face weak market conditions and strong competition from Asian producers.
SASA’s parent company, Erdemoglu Holdings, holds 70.29% of the company following the sale of a 3.9% stake in October 2025. Fitch rates SASA on a standalone basis as it operates independently and relies mainly on external funding.
The rating agency also noted SASA’s concentration risk, with production centered at a single site in Adana, Turkey, exposing it to potential operational disruptions.
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