Fitch assigns Barloworld negative outlook

Fitch Ratings said it affirmed Barloworld Ltd.'s ratings at national senior unsecured AA-(zaf) and short-term F1+(zaf) and removed them from Rating Watch negative.

The outlook is negative.

The removal of the watch follows Barloworld's assurance that its restructuring announced in December 2006 will benefit the group in the medium- to long-term, Fitch said.

Fitch said Barloworld has told the agency that it has renewed its focus on existing business units both in South Africa and internationally, which will increase earnings, improve operating efficiencies and reduce gearing in the medium-term.

The sale of the manufacturing-intensive business units should result in lower capital expenditure and restrain borrowing requirements, Fitch said.

The outlook reflects the agency's concern that despite its positive financial projections, Barloworld may be unable to reestablish the group's strong earnings and credit profile that existed before the restructuring announcement, the agency said.

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