S&P downgrades UniTek

Standard & Poor's said it lowered the corporate credit rating on UniTek Global Services Inc. to CCC from B+ and lowered all issue-level ratings by four notches.

The agency said it placed the corporate credit rating and issue-level ratings on CreditWatch with developing implications.

The actions follow UniTek's report that certain employees in its Pinnacle Wireless subsidiary engaged in fraud that resulted in improper revenue recognition, said Michael Weinstein, an S&P analyst.

The company will be restating its consolidated financial statements dating back to Oct. 1, 2011, the agency said, and the release of its audited 2012 annual report will be delayed.

Additionally, the company fired its chief financial officer, corporate controller and the president of its Pinnacle Wireless division, S&P said.

While the legacy Pinnacle business contributed less than 10% of the company's total revenues since its acquisition in April 2011, the agency said it believes the restatements could potentially affect the company's credit profile, including the ability to meet its total leverage covenant, which had less than 5% EBITDA cushion as of the quarter that ended Sept. 30, 2012.

© 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.