Fitch lowers Honghua Group

Fitch Ratings said it downgraded Honghua Group Ltd.’s long-term issuer default rating and senior unsecured rating to B from BB- with a recovery rating of RR4.

The outlook is negative.

The downgrades reflect deterioration in Honghua’s profitability and cash flow generation during the difficult operating environment for the oil and gas sector in the first half of 2015, Fitch said.

Its rapidly declining revenue has led to shrinking operation scale, the agency said.

The negative outlook reflects low visibility of the oil and gas industry trough, which could lead to further weakening in the Honghua’s operations, Fitch added.

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