Fitch cuts Winsway notes to C

Fitch Ratings said it affirmed China-based Winsway Enterprises Holdings Ltd.’s issuer default rating at CCC.

No outlook was assigned.

This rating reflects on-going concerns about the company's liquidity and ability to refinance debt.

Winsway's senior unsecured rating and the rating on its 2016 dollar-denominated notes were downgraded to C from CCC-, as the recovery rating was lowered to RR6 from RR5.

The company, which provides logistics services for bulk commodities, changed its name from Winsway Coking Coal Holdings Ltd. in July.

Fitch does not expect Winsway's core business to generate positive free cash flow for the foreseeable future (first half 2014: a reported gross outflow of HK$337 million). Fitch believes the prospects for improvement are low, barring a sharp and sustained increase in coking coal prices. This weakens the prospect that cash resources would increase sufficiently to repay the dollar-denominated notes in 2016.

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