Moody's affirms Posco Engineering

Moody's Investors Service said it affirmed Posco Engineering & Construction Co. Ltd.'s Baa1 issuer rating.

The outlook is stable.

This action comes after news that the company has acquired a 60% stake in Daewoo Engineering Co. for a consideration of KRW216 billion, which was funded with a three-year $250 million bond issuance.

The acquisition is relatively modest in relation to the company's asset base and therefore will not have a material impact on its financial profile, Moody's said.

Posco will likely benefit from possible synergies with Daewoo's engineering expertise in petrochemical plants and various turnkey projects, the agency said.

However, given the increased financial leverage following the acquisition, further debt-funded acquisition activities could place pressure on its rating, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.