Fitch ups Hutchison Whampoa outlook to stable

Fitch Ratings said it revised the outlook on the A- senior unsecured foreign currency rating of Hong-Kong based Hutchison Whampoa Ltd. to stable from negative. The agency affirmed the rating and the company's F2 short-term foreign currency.

The outlook revision, which affects $12 billion and €2.5 billion of long-term bonds and notes, reflects Hutchison's ongoing net debt reduction efforts and anticipated further improvement in overall profitability and credit ratios as losses in its 3G telecommunications operations abate, the agency said.

Hutchison's net debt peaked at HK$185.7 billion in the first half of 2005 due to asset acquisitions in its retail and infrastructure businesses and its continued negative free cash flow generation arising from losses in the 3G businesses. However, Fitch estimated that net debt fell to below HK$170 billion for the full year, due primarily to asset disposals such as the sale of a 20% stake in Hutchison Telecommunications International Ltd. in December.

Fitch said it expects the reduction in net debt to continue in 2006 and beyond as Hutchison starts generating positive free cash flow and continues to raise funds from selective strategic transactions. Net adjusted debt to operating EBITDAR should improve for fiscal year 2005 to below 8.5x from 28.0x for fiscal 2004, the agency predicted.

© 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.