LONDON Jan 24 Credit rating agency Moody's has
cut German steelmaker ThyssenKrupp's debt to "junk"
status, a move it said reflected challenging market conditions
and ongoing cash losses in the group's Americas business.
Moody's downgraded Germany's largest steelmaker to "Ba1"
with a negative outlook, from "Baa3", citing the fact the
group's planned sale of its Steel Americas arm may be below a
book value of 3.9 billion euros ($5.2 billion) - already written
down last year - and not happen until the company's fourth
quarter, which ends in September. That would force the group to
absorb ongoing losses for the full year.
ThyssenKrupp said earlier this month that it hoped to wrap
up the sale of the mills in Brazil and the United States this
year, ending a costly foray for the group.
"The negative rating outlook indicates the challenges posed
over the next 12 months by the soft European economy and, in
particular, lacklustre steel and automotive markets," Moody's
said. "The outlook also reflects uncertainty surrounding the
sale of Steel Americas, further asset impairments and possible
shareholder and rail price-fixing lawsuits."
Moody's, however, said it had taken into account
ThyssenKrupp's efforts to prune its sprawling portfolio and to
push through cost cuts as it seeks to end a period of losses.
Moody's cut the rating of steelmaking giant ArcelorMittal,
the world's largest, to "junk" in November.