Yuexiu Transport Infrastructure's (HKG:1052) proposed purchase of an 85% equity stake in Shandong Qinbin Expressway will catalyze revenue and EBITDA expansion, Fitch Ratings said in a recent release.

Still, Fitch expects the deal to be credit neutral for the acquirer.

Shandong Qinbin Expressway will account for 12% to 15% of Yuexiu Transport Infrastructure's consolidated revenue and EBITDA following the acquisition, Fitch said.

The acquisition will also anchor the acquirer's EBITDA growth and lengthen the average concession life of its assets to 12 years, the rating agency said.

The acquirer's net leverage could rise temporarily upon the deal's completion, although it would recover given stable cash flows from the target company, according to Fitch.

With Shandong Qinbin Expressway being located in the major economic province of Shandong, it is set to gain from further economic linkages in the Boahi Rim and steady freight volumes, the rating agency said.

This contributes to Yuexiu Transport Infrastructure's regional expansion focus, with positive effects from growth in eastern coastal China, Fitch said.