Moody's may cut Ricoh

Moody's Investors Service said it placed on review for possible downgrade the A1 long-term debt ratings of Ricoh Company, Ltd. and A1 long-term ratings and prime-1 short-term ratings of its supported subsidiaries.

This action is prompted by news that Ricoh reached a deal to acquire IKON Office Solutions, Inc. with support of both companies and boards of directors.

Although this transaction may help further strengthen Ricoh's global sales power and stabilize overall cash flow, Moody's said it is concerned that it may constrain Ricoh's financial flexibility over the medium term.

The cost of the acquisition is projected by the company at about $1.617 million, most likely to be financed by external debt and cash in hand, the agency said.

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