Moody’s might drop Hengdeli

Moody's Investors Service said it placed Hengdeli Holdings Ltd.’s Ba3 corporate family rating and the Ba3 rating of its senior unsecured bonds under review for downgrade.

The action follows Hengdeli's Dec. 30 announcement that it would make a very substantial asset disposal.

"The announced sale of Hengdeli's core watch retailing and distribution business in China will materially change the company's business profile," Moody's vice president and senior analyst Gloria Tsuen said in a news release.

Hengdeli plans to sell its wholly-owned subsidiary, Xinyu Fine Watch Service Co., Ltd. (unrated). It also plans to sell its 75.54% stake in Harvest Max Holdings Ltd. (unrated), which recorded a RMB 42 million loss in 2015, the agency explained. Both sales will be to Hengdeli's chairman, who owns 33% of the company.

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