Fitch: Sitronics outlook negative

Fitch Ratings said it changed JSC Sitronics' outlook to negative from stable and affirmed its long-term issuer default rating at B-.

The agency said the negative outlook reflects Sitronics' weakening credit profile due to declining operating margins and high leverage as well as increased refinancing risk in light of its sizable short-term maturities over the next six months.

Fitch understands that Sitronics is working on options to refinance its $125 million term loan maturities due in November, but the agency said it remains concerned about the company's ability to secure external financing in the currently difficult capital market conditions.

Operationally, Sitronics remains a high-growth company, Fitch said, and the completion of the 0.18 micron chip manufacturing process technology has strengthened Sitronics' position in the fast-growing smart-cards and microchip technology business in Russia and the company continues to win government-sponsored contracts.

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