Fitch affirms Vestel ratings

Fitch Ratings affirmed Vestel Elektronik Sanayi Ve Ticaret AS's senior unsecured foreign currency rating at B and its local currency rating at BB-.

Vestel's foreign currency rating is constrained by the Turkish sovereign rating of B and has a positive outlook, as does the sovereign rating. The outlook for the local currency rating is stable.

Fitch said the affirmation follows Vestel's acquisition of a further 25% share of Vestel White Goods from the Zorlu family for a TRL52 trillion (€30 million) cash on Dec. 29. This action increased Vestel's stake in Vestel White to 35%.

Vestel has said it intends to increase its total share to 51% in the future to further enhance control. Fitch noted in September that any bulky acquisition would be a rating review trigger for Vestel and commented that Vestel White could be a candidate for capital injection due to its weak capital structure.

Fitch said it does not believe that the announced acquisition will cause a significant increase in Vestel's leverage ratios or a deterioration in its creditor protection measures, leaving the ratios comfortable for the present rating category.

According to the announced IAS interim results, Vestel had $142 million net debt in the first half of 2003 with a net debt/annualized EBITDA ratio of 0.8x. Assuming no change in net debt position, an outflow of €30 million for the acquisition is estimated to cause the leverage to rise to between 1.0x-1.1x, the agency said.

© 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.