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Fitch: GATE view to negative
Fitch Ratings said it affirmed Global A&T Electronics Ltd.’s (GATE) long-term foreign-currency and local-currency issuer default ratings at B-.
The outlook also was revised to negative from stable.
The company’s liquidity is expected to deteriorate during 2015 through 2016 due to lower cash generation and continuing high interest costs, Fitch said.
GATE’s 2016 liquidity ratio could fall to less than 2x, which is the agency’s threshold for a downgrade.
The company has limited access to capital because it cannot draw down on its $125 million revolving credit facility due to a breach in a debt-service incurrence covenant in its secured bond documents, Fitch said.
GATE’s management is considering options to move cash from its sister company, UTAC Manufacturing Services Holdings Pte., monetize its Singapore facility and sell non-core assets to boost liquidity, the agency said.
But Fitch said its ratings assumptions will not include these sources of cash until any transactions are substantially completed.
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