Forbes has reported that Moody’s Investors Service downgraded the ratings of Vestel Elektronik Sanayi ve Ticaret AS to ‘B2’ from ‘B1’, citing its concerns regarding the challenges the Turkey-based company faced in improving its operational performance and restoring profitability.
The rating repositioning comes after an assessment of Vestel’s results for the first nine months of 2007 in conjunction with the consideration of possible operating performance trends looking prospectively into 2008, Moody’s said.
‘Although Moody’s acknowledges that seasonal factors are likely to have resulted in some improvement in the fourth quarter of 2007, looking into 2008 there is lack of visibility with regard to the timing and extent of any recovery in the company’s operating performance which may ultimately exert further pressure on the company’s cash flow generation capacity over the next 12 months,’ the agency said.
However we have been told that Vestel have been expanding in both range and reach over the past year as well as making massive improvements to product quality and this would also place pressure on cashflow. Certainly the products we’ve seen over the past six months have massively improved on design, functionality and quality over what we saw a couple of years ago.
