Fitch cuts Delta Merlin

Fitch Ratings said it downgraded PT Delta Merlin Dunia Textile's long-term issuer default rating to B- from BB- and the rating on its dollar notes to B- with a recovery rating of RR4.

All ratings were placed on rating watch negative.

“The downgrades reflect DMDT's heightened refinancing and liquidity risk,” the agency said in a news release.

“DMDT's liquidity has been hurt by slow sales and stretched working capital due to intensifying competition following the increased supply of cheap fabrics from China.”

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