Fitch revises GKN outlook to positive

Fitch Ratings said it revised GKN Holdings Ltd.'s outlook to positive from stable while affirming its BB+ long-term issuer default rating.

The positive outlook reflects our expectation that GKN's EBITDA leverage will be sustainable at below 3x in the next two years, the bbb mid-point under our aerospace & defense (A&D) navigator. We expect that following its demerger from April 2023, it will have stronger leverage metrics, supported by operating margin improvement primarily due to recovery in the aerospace industry after the pandemic.

“Moreover, the group should start to see the results of its restructuring program, which is mostly to be completed in 2023. This should help improve its sustainable positive free cash flow (FCF) generation,” Fitch said in a statement.

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