Moody’s shifts thyssenkrupp view to negative

Moody’s Investors Service said it changed the outlook to negative from stable on the ratings of thyssenkrupp AG.

“The negative outlook reflects the increased risk of tk failing to considerably strengthen its profitability and return to positive free cash flows over the next 18 months. The outlook also mirrors the reduced visibility of tk being able to successfully execute its new strategy in a timely manner, which should help significantly strengthen its balance sheet and currently very weak credit metrics,” said Moody’s in a press release.

Moody’s also affirmed the group’s Ba3 corporate family rating, the Ba3-PD probability of default rating and the Ba3 ratings on the group’s senior unsecured debt instruments.

The rating action reflects the company’s weakened operating performance resulting in a substantial negative free cash flow in the financial year ended Sept. 30 and the group’s disappointing outlook for the current year with continued negative free cash flow generation amid expected persistent demand weakness and challenging trading conditions, the agency said.

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