Fitch affirms Vestel

Fitch Ratings said it affirmed Vestel Elektronik Sanayi Ve Ticaret AS's senior unsecured foreign and local currency ratings, both at BB-. The outlook is stable.

Fitch said Vestel's ratings reflect a series of factors, including its healthy position in the European B-branded color television market, growing revenues from A-branded products, a solid track record with European retailers/wholesalers, the entry into relatively higher margin white goods segment, growing economies of scale and a quality product range and increasing geographical diversification.

Counterbalancing this, Fitch said the company has to contend with pricing pressure in its core product segments of conventional color televisions and digital convergence devices, increasing funding needs, an appreciating Turkish lira, high financial expenses, industry consolidation, limited cooperation with technology leaders in high-end product segments, competition from Far Eastern manufacturers and Zorlu Holding's, Vestel's main shareholder's, and aggressive growth strategies.

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