Fitch downgrades Zoomlion

Fitch Ratings said it downgraded Zoomlion Heavy Industry Science and Technology Co. Ltd.’s long-term issuer default rating to BB from BB+.

The outlook is negative.

Fitch also said it downgraded the company’s senior unsecured rating to BB- from BB+.

The bonds issued by Zoomlion HK SPV Co. Ltd. also were downgraded to BB- from BB+.

The downgrades reflect Zoomlion’s weaker-than-expected business performance during the industry downturn and its rapidly deteriorating financial profile, Fitch said.

The negative outlook was maintained as there is no visibility of industry recovery and sustained improvement in Zoomlion’s working capital position, which remains uncertain, the agency said.

But Fitch said it believes its financial profile can recover to levels supporting its current rating when the industry recovers from its current trough.

Zoomlion’s ratings are supported by its industry leadership position and continuous efforts on product diversification, the agency said.

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