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Research Update: Hidili Industry International Development Ltd. Rating Lowered To 'B+' On Expected High Leverage; Outlook Stable Dec 11
Standard & Poors, Dec 2011
Abstract
China-based coking coal producer Hidili's ramp-up of production is still slower than we had expected. We anticipate the company to generate sizable negative free operating cash flow due to an increase in working capital requirement and capital investment to bring its acquired mines in Yunan and Guizhou to production. We are lowering our ratings on Hidili and the company's senior unsecured notes to 'B+' from 'BB-'. We are also affirming our 'cnBB' Greater China scale credit rating on Hidili and the notes. The stable outlook reflects our expectation that the company will refinance its convertible bond in January 2013 and reach a 5 million tons run rate in raw coal production in 2012. On Dec. 5, 2011, Standard & Poor's...
Companies mentioned in this report are: Hidili Industry International Development Ltd.
Action: Downgraded
Action: Outlook: Stable
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.
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