Moody’s downgrades Oragroup to Caa3, outlook negative

Investing.com -- Moody’s Ratings has downgraded Oragroup S.A.’s long-term issuer ratings to Caa3 from Caa2 and changed the outlook to negative, concluding a review for downgrade that began on December 19, 2024.

The rating action follows Vista Group Holding SA’s decision on May 13, 2025 to abandon its plan to acquire a majority stake in Oragroup by withdrawing from a sales and purchase agreement with Emerging Capital Partners (WA:CPAP), Oragroup’s existing majority shareholder.

Moody’s has affirmed the group’s notional Baseline Credit Assessment (BCA) and Adjusted BCA at c, while also affirming Oragroup’s Not Prime short-term issuer ratings.

The downgrade to Caa3 reflects Moody’s assessment that potential losses for senior unsecured debtholders are more aligned with this rating level given the group’s unresolved capital shortfall. The rating agency also cited increased pressure on the holding company’s already tight liquidity position and prolonged uncertainty related to the recapitalization plan following Vista’s withdrawal.

Despite receiving shareholder approval in September 2024 to raise up to XOF160 billion (approximately $256 million) in common equity capital, Oragroup continues to operate with capital ratios below regulatory thresholds.

The failed recapitalization process has further strained Oragroup’s liquidity position, creating greater short-term refinancing risks as the company faces sizable debt maturities this year. The current low capital levels compromise the firm’s ability to absorb potential losses and operate without regulatory constraints.

On May 19, 2025, Oragroup’s board of directors approved an alternative recapitalization process from existing shareholders, led by the West African Development Bank (BOAD), which holds a 2% stake in Oragroup. This plan requires approval from the group’s respective shareholders.

Moody’s maintained Oragroup’s Governance Issuer Profile Score at G-4 and its ESG Credit Impact Score at CIS-4, reflecting ongoing governance challenges evidenced by the breach of minimum regulatory ratios and pressure on liquidity.

The negative outlook reflects Moody’s expectation that Oragroup’s stalled recapitalization plan presents continued execution risk that could lead to higher than anticipated potential losses for senior unsecured debtholders.

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