(The following statement was released by the rating agency) LONDON, October 26 (Fitch) Fitch Ratings says Naspers Limited's (BB+/Stable) increased stake in Russian online classified advertising platform, Avito, will be neutral for the company's rating. Naspers has announced it will increase its stake in Avito to 67.9% from 17.4%. In Fitch's view, the acquisition fits within Nasper's overall ecommerce strategy, representing a business it has been invested in for a number of years and therefore knows well. Avito appears well established as Russia's leading online classified platform, with strong market positions in each of the key market verticals. The business is growing strongly and profitably, with revenue growth of 47% in the last 12 months (LTM) to June 2015 and an LTM EBITDA margin of 49.8%. Fitch recognises the value of being the established market leader in online classified advertising; a business model where competition can be high but where audience market share is important and where traffic and therefore audience monetisation tend to consolidate around the market leader. Although it is a well- established classified online market, Fitch considers Russia continues to represent significant growth potential albeit with competition across the key verticals. Naspers has said that it is evaluating suitable long-term funding alternatives and that it does not expect the transaction to materially increase its existing debt profile. Given the wide array of portfolio options available to the group to fund the acquisition, Fitch does not therefore expect current leverage metrics to be materially affected. Credit metrics continue to be weakened by the level of development spend being invested in some of the earlier stage ecommerce businesses. Fitch expects Naspers' operational and financial profile to become more compatible with that of an investment grade rating if development spend falls and if cash flow generation from e-commerce significantly improves over the next two to three years.. In the meantime, the liquidity and value of the company's associate investments - notably its stakes in Tencent and Mail.ru - provide some flexibility and tolerance given the company's near term cash flow and leverage profile. However, we do not explicitly factor these stakes into the ratings. Contacts: Damien Chew, CFA Senior Director +44 20 3530 1424 Fitch Ratings Limited 30 North Colonnade London E14 5GN Stuart Reid Senior Director +44 20 3530 1085 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: [email protected]. Additional information is available on www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.