Moody's cuts Kremikovtzi view to negative

Moody's Investors Service said it changed the outlook to negative on Caa1 corporate family rating of Kremikovtzi AD and Caa1 rating with LGD 4 (55%) on its € 325 million senior secured guaranteed notes raised at Bulgaria Steel Finance BV to reflect lower that originally expected profitability in 2007.

The ratings reflect strong energy and raw material prices, along with the inflation impact on labor and overheads costs, the agency said. The company continues to invest to secure future profitability and growth in volumes, Moody's said.

To stabilize the outlook on the ratings, Moody's said it will look for a resolute strengthening in profitability in line with initial projections and an improvement in cash flow generation and in the liquidity position of the company.

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