Fitch Maintains Iansa's Ratings on Watch Negative

--Local Currency Issuer Default Rating (IDR) 'B-';

--Foreign Currency IDR 'B-';

--Senior unsecured notes due 2012 'B+/RR2';

--National Scale Rating 'BB-(cl)'.

Fitch also affirms the following rating:

--National Scale Equity Rating at Level 4.

Iansa's credit profile continues to reflect the low profitability of its main business lines and high levels of leverage. Fitch expects that the coming several quarters will be key in stabilizing the company's financial flexibility and credit ratios, which are currently in a position to strengthen by the end of 2010, considering the higher expected production and profitability levels that the sugar and sugar byproducts business over the coming year. Further, the company has positively managed to finance its working capital needs, while also lowering its short-term debt.

Consolidated Results Weak, Limited Profitability:

Iansa's consolidated profitability further deteriorated in the first nine months of 2009. The company's results were negatively affected by setbacks in the sugar and sugar byproducts, the animal nutrition and pet food, and agricultural management businesses. Though consolidated sales decreased 17% compared to the first nine months of 2008, EBITDA was 44% lower, despite the savings plan initiated by Iansa in the middle of 2008.

In the last two agricultural seasons, Iansa registered a considerable decrease in sugar production, as a result of both a lower beet plantation due to increased competition from alternative crops; as well as lower beet productivity due to adverse weather conditions. In the 2008/2009 season, ended last September, Iansa reached a sugar production of 171.000 tons, 9% below the previous season and well below the 400.000 tons the company requires to maintain its 60% market share. Iansa has compensated lower sugar production with less profitable imports, which has affected the business margins.

In the first nine months of 2009, the sugar and sugar byproducts business (61% of consolidated income) registered a 2% sales increase, while the EBITDA decreased by 46%. Though Iansa was benefited by the 23% increase in international sugar price and inventory sales compensated for the lower production, operational margins were affected by higher unit costs as a result of the 40% increase in the price paid to beet farmers in the agricultural season ended last September.

Regarding the agricultural management business (8% of consolidated income), EBITDA was 69% lower compared to the first nine months of 2008, due to the drop in fertilizers price and the leasing charges associated to own beet plantations incorporated into the cost structure in 2009. The animal nutrition and pet food business (11% of consolidated income) had operational losses due to the crisis of the cattle and dairy industry in Chile, in line with lower milk prices.

Liquidity Improves on Lower Working Capital & Short-Term Debt:

In the last twelve months (LTM) ended Sept. 30, 2009, Iansa's EBITDA reached US$11 million. Considering financial expenses for US$13 million and other incomes for US$15 million (including compensations related to a claim from a fire in Chillan, and for the stake purchase option in Anagra that Mutsui Agro Business S.A. did not exercise), Funds from Operations (FFO) totaled US$14 million. In the same period, Iansa reduced its working capital requirements by US$46 million, mainly in the juice concentrate business, which along with a capital expenditure for US$5 million, resulted in a Free Cash Flow of US$55 million, which was mainly used to reduce short-term debt.

As of Sept. 30, 2009, Iansa had a total debt of US$181 million, which showed a US$49 million drop as compared to the same date the previous year and a US$23 million drop as compared to the end of 2008. This debt is composed of US$71 million from banks; US$87 million from bonds (net); US$6 million from leases and US$15 million in sugar buy-back agreements. The company issued a Yankee bond in July 2005 for US$100 million, maturing in 2012, for which the company already repurchased for US$13 million.

Regarding the financial expenses coverage limit related to the Yankee bond, as of Sept. 30, 2009, Iansa's coverage ratio was lower than the mandatory 2.4 times (x). Although this incompliance does not trigger an event of default on the bonds, it does generate limitations in terms of debt increases, guarantee constitution, dividends and capital expenditure. Based on these limitations, Iansa must comply with the maximum banking debt limit (including the bond debt) of US$170 million. As of Sept. 30, 2009, this debt reached US$159.5 million.

The 'RR2' Recovery Rating for the Yankee bond indicates that in the event of financial difficulties Iansa's unsecured notes have an expected average recovery level of between 71%-90%. This rating reflects Fitch's methodology which includes a recovery analysis when the assigned IDR of an issuer falls below 'B+'.

Although by Sept. 30, 2009, Iansa's short-term debt totaled US$89 million, in the next twelve months, Iansa faces amortizations for only US$3 million, while the remaining US$86 million correspond to revolving debt (working capital lines and buy back agreements). Iansa's liquidity also rests on the US$39 million it maintains in cash balances.

Possible Turnaround in 2010:

Credit ratios for Iansa have strongly deteriorated since 2008, reflecting a lower operational cash flow generation, a higher level of debt and increase in financial expenses. The drop in operational flows for the company during the first nine months of 2009 has added pressure to the financial ratios, which could not be compensated by the decrease in leverage. During the LTM ended on Sept. 30, 2009, Iansa reached an EBITDA / Financial Expenses coverage of 0,9x (1.4x in 2008; 3.9x in 2007) while the Total Debt / EBITDA ratio was 16.4x (13.5x in 2008; 3.2x in 2007).

During the current 2009/2010 season, the area planted with beet has increased by 24%, while Iansa has managed to decrease the price paid to growers by 25%, going from US$70/ton to US$52.5/ton. The company also estimates that there will be better agricultural productivity, considering the adequate weather conditions during the sowing beet period, sugar production could increase by close to 40%. This would lead to improved margins and flow generation for the sugar business in 2010, which would favorably impact the financial flexibility and credit ratios of the company at the consolidated level. Fitch estimates that by the end of 2009, Iansa could reach a financial expenses coverage ratio over 2.0x and a Total Debt / EBITDA ratio below 7.0x.

Iansa is the only sugar producer in Chile, a business that is complemented by sugar byproducts (molasses and beet pulp). The other businesses of the company are: i) animal nutrition and pet food; ii) agricultural management (sale of agricultural supplies, financial services for agriculturist and management of the company's fields); iii) juice concentrates for the exports market under a joint-venture agreement with Cargill and Jucosa (Patagoniafresh S.A.) and; iv) tomato paste in Peru (Icatom S.A.). Iansa's property is concentrated in ED&F Man, a sugar trader based in England, which indirectly owns 27.47% of the company's stock.

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