S&P: Ritek unaffected

Standard & Poor's said that its rating on Ritek Corp. (B+/stable/--) would not be affected by a NT$4.9 billion asset write-off and poor fourth quarter operating results.

Ritek incurred a pre-tax loss of NT$6.8 billion in the fourth quarter of 2004 as a result of an asset write-off, a difficult pricing environment, and foreign currency exchange losses. The write-off was a result of new accounting rules that require listed companies to test their fixed assets, goodwill, and long-term holdings each quarter for possible impairment.

The assets written off included loss-making equity investments and overseas manufacturing subsidiaries. The write-off, which is a non-cash item, does not impact Ritek's cash flow measures and financial covenants contained in its loan agreements, S&P said.

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