Moody's drops Erdemir outlook to negative

Moody's Investors Service said it has changed the outlook on Erdemir's Ba3 corporate family rating to negative from stable.

The rating action has been prompted by the significant downturn in the steel industry, which severely affects Erdemir, the agency said.

The company still benefits from high profitability generated in 2007 and the first nine months of 2008, but Moody's said it does expect a substantial weakening in the company's performance in the fourth quarter 2008 and well into 2009.

Moody's added it would expect Erdemir to generate free cash flows, however, due to a scale down of capital expenditure, prudent dividend policy and the release of net working capital, which has been built up in the third quarter of 2008 and led to a cash outflow of TRY 1.7 billion during the first nine months of 2008.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.