TomTom shares at all-time low on refinancing fears

AMSTERDAM (Reuters) - Shares in Dutch navigation device maker TomTom (TOM2.AS) hit an all-time low on Thursday as an analyst raised concerns it may need to refinance its debt before end-2009 and as consumer spending slows.

"We are concerned that high gearing and exposure to weak consumer spending may result in a need for refinancing before the end of 2009," JP Morgan analyst Rod Hall said in a note on Thursday, initiating coverage with an "underweight" rating.

Shares in TomTom, which makes portable navigation devices for cars and mapping software for handheld computers, were down 5.5 percent at 11.15 euros at 7:05 a.m. EDT, underperforming a 0.6 percent higher DJ Stoxx European Technology index .SX8P.

Earlier, they sank to 10.88 euros, their lowest ever.

TomTom declined to comment on the analyst reports and the share move. Its net debt totaled 1.3 billion euros at the end of the second quarter following its 2.9 billion euro takeover of map maker Tele Atlas.

Portable navigation devices are one of the fastest-growing consumer electronics categories, but also one that has not been tested yet in an economic downturn. Analysts have said it is also unclear what level of market penetration the devices can realistically achieve, complicating growth forecasts further.

JP Morgan's Hall said in order to make its net debt/EBITDA ratio target of 2.5 at the end of 2009, TomTom needs to ship 15.8 million units in 2009, which would mean year-on-year growth of 27 percent.

"We believe this will be difficult to achieve with slower consumer spending," the analyst said, adding he estimates 14 million units in 2009, implying a 12 percent growth from this year.

TomTom, whose main competitor is U.S. market leader Garmin (GRMN.O), expects to sell 14 million to 15 million units this year, when revenues are expected to rise 5 to 10 percent.,

TomTom shares, which were listed in May 2005 at 17.50 euros, have lost 25 percent since last Thursday, when the company held an analyst day, and 83.7 percent since October 29 last year, when shares hit a record high of 66.70 euros.

On Monday Goldman Sachs analyst Tim Boddy cut his rating on the stock to "sell" from "neutral," citing slowing demand for personal navigation devices and a high financial leverage.

(Reporting by Harro ten Wolde; editing by John Stonestreet)