Fitch Ratings claims Evraz Group’s profits in jeopardy

12 May 2009 (08:13)

Fitch Ratings, the international rating agency, put Evraz Group SA’s long-term Issuer Default Rating (BB) and its priority unsecured rating (BB) on the Negative Rating Watch recently. At the same time, Mastercroft Limited's long-term Issuer Default Rating (BB) has also been placed on this list. As it happens, Mastercroft is Evraz’s daughter enterprise. Both companies’ short-term Issuer Default Ratings have been affirmed at B.

The Negative Rating Watch indicates that Fitch is rather worried about the company’s overall debt/EBITDA and net debt/EBITDA ratios not keeping up with the level needed to keep the current ratings in the next two years or so. The agency feels that Evraz’s profits have been jeopardized by the plummeting global demand and steel prices. For one, the market opportunities kept going from bad to worse in the first quarter of 2009, so Fitch expects this state of events to remain unchanged for the rest of the year.

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