Fitch puts Bright Food on evolving watch

Fitch Ratings said it placed Bright Food (Group) Co., Ltd.'s long-term issuer default rating and senior unsecured rating of BBB- on Rating Watch evolving.

The BBB- ratings on Bright Food's indirect wholly owned subsidiary, Bright Food Hong Kong Ltd., and the senior notes issued by Bright Food Hong Kong also were placed on evolving watch.

The watch reflects uncertainty over the outcome of a reassessment of the linkage between Shanghai's state-owned assets supervision and administration commission and Bright Food, Fitch said.

This reassessment will likely result in a revision of Bright Food's ratings, the agency said.

State-owned Bright Food is mainly involved in food-related businesses, though it has interests in property and logistics, Fitch said.

If the reassessment concludes there is a stronger linkage between the two entities than previously thought, Fitch said it will likely adopt a top-down approach to the ratings instead of the current bottom-up approach, which could lead to an upgrade.

If the linkage between the two entities remains unchanged, Bright Food's weakened financial profile, which stems from recent acquisitions, will result in a downgrade, Fitch said.

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