Fitch puts Rank on negative watch

Fitch Ratings said it placed The Rank Group plc's BB+ senior unsecured debt rating on Rating Watch negative. The short-term debt rating was affirmed at B.

The rating action follows the disposal of Rank's film processing business, Deluxe Film, for £430 million and a potential return of capital to shareholders to be announced in conjunction with the company's 2005 preliminary results in March 2006.

If the transaction is completed, Rank will not only lose an element of cash flow diversification but could also move towards a more leveraged capital structure, the agency said. Furthermore, the company's ability to increase its debt is constrained by the financial covenants included in its bank facilities and its U.S. private placement.

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