Aug 10 2010 |
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S&P removes DIFCI from CreditWatch negative
Standard and Poor's ratings agency on Monday removed DIFC Investments from CreditWatch negative, but warned that it has to sell more assets to put the company on self-sustainable footing.The outlook remains negative.
Dubai-based real estate and financial investments group DIFC Investments ( DIFCI ) has embarked on a $1 billion plus restructuring plan aimed at divesting its noncore investments by the end of 2011.
"We are affirming our 'B+/B' long- and short-term corporate credit ratings on DIFCI , removing them from CreditWatch negative, and assigning a negative outlook. We are lowering our assessment of the company's standalone credit profile to 'B-' from 'B+', while raising our government support assumptions to 'moderately high' from 'low'," a press statement said.
DIFCI 's credit strengths include, in S&P's opinion, stable cash flows from its core business of running the infrastructure of the DIFC and make a strong market position.
The negative outlook reflects uncertainties over the timing and success of an ambitions disposal programme for DIFIC.
"We could consider downgrading the company in particular if it fails to reduce its debt to around $1.3bn, a level at which we estimate it will achieve a breakeven operating cash flow. We believe that the government will continue to support DIFCI with ongoing funding to enable it to complete the disposal plan," said the ratings agency.
By Staff
© Emirates Business 24/7 2010
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