Fitch downgrades Derindere

Fitch Ratings said it downgraded Derindere Turizm Otomotiv Sanayi Ve Ticaret AS' national long-term rating to BBB-(tur) from BBB(tur).

The outlook is negative.

The agency also revised the outlook on the long-term issuer default rating to negative from stable and affirmed it at B.

Fitch said the action reflects deterioration in Derindere's capital adequacy and the quality of the entity's capital.

“The balance sheet leverage as defined by debt/equity increased to 9.4x at end-1H17 from 7.0x a year before. This was driven by continuing aggressive growth in 2015-1H17 while profitability remained modest,” the agency said in a news release.

“Cash flow leverage is also increasing, even after earnings are adjusted for significant negative FX effect.”

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