Nextil improves credit rating, eyes expansion in Portugal and Guatemala

Madrid – Following a period of strong financial results and a strengthened balance sheet, Spanish textile company Nextil is accelerating its 2024–2026 Strategic Plan. The plan is centred on three key initiatives: improving its credit rating, expanding operations in Portugal through acquisitions, and increasing production capacity at its plant in Guatemala.

Financial and strategic updates

Nextil recently received a credit rating of BB- with an "evolving" outlook from Ethifinance Rating, a "significant milestone" that reflects the company's structural and financial improvements. The company is now preparing to request a new review of its credit rating after further reducing its net debt and increasing its net equity. This improved financial standing is expected to enable the company to pursue inorganic growth and other investments outlined in its strategic plan.

Nextil is currently in "advanced negotiations" to acquire up to three Portuguese textile companies to strengthen its garment unit. This unit, which specialises in luxury and premium garments, accounts for 75 percent of the company's total turnover. The target companies have turnovers ranging from 12 million euros to 30 million euros and align with Nextil's criteria for inorganic growth, which includes a strong client portfolio and the potential for a 51 percent initial acquisition.

Expanding production in Guatemala

The company is also prioritizing the expansion of its production plant in Fraijanes, Guatemala. Following the completion of Phase I with a total investment of $23 million, the plant has an annual production capacity of 35 million dollars. In light of strategic agreements, such as a minimum 175 million dollars contract with the US company Maxum, Nextil is moving forward with a Phase II expansion.

This next phase has already secured over 3 million dollars in funding, with an additional 6 million dollars scheduled for investment in the coming months. These funds will be used for new equipment, increasing the plant's annual production capacity to 75 million dollars by the end of 2025. This expansion is supported by client demand for long-term production programs, and Nextil anticipates a "significantly higher turnover" in the second half of 2025 as production pace gradually increases.

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