Fitch puts Arcelik on negative watch

Fitch Ratings said it put Turkey-based Arcelik AS's BBB- local-currency issuer default rating and AA+(tur) national long-term rating on rating watch negative. The BB foreign-currency issuer default rating was affirmed with a positive outlook.

The rating watch placement follows Arcelik's announcement that it increased its stake in Beko Elektronik to 72.46% from 22.36% for TRY190 million in cash. The stake was purchased from Koc Holding and other Koc entities.

The agency said the negative watch reflects the negative impact that Beko would have on Arcelik's financial profile. On a standalone basis, Arcelik benefits from a strong business profile and a sound financial position. Beko, on the other hand reported operating and net losses in the last two years with considerable debt stock for its size, according to Fitch. Arcelik will consolidate in its 2006 results all of Beko's financial debt in addition to Beko's accumulated losses.

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