[ET Net News Agency, 22 January 2013] Standard & Poor's Ratings Services said it had
lowered its long-term corporate credit rating on Winsway Coking Coal Holdings Ltd. (01733)
to 'B' from 'B+'.
At the same time, the agency lowered the rating on the company's senior unsecured notes
to 'B' from 'B+'. It also lowered its long-term Greater China regional scale rating on
Winsway and on the notes to 'cnB+' from 'cnBB-'.
In addition, S&P placed all the ratings on CreditWatch with negative implications.
"We downgraded Winsway because we are unclear if the company can turn around its
financial performance in 2013 following an expected loss in 2012," said S&P's credit
analyst Huma Shi.
"A recent profit warning from Winsway suggests that its financial results for 2012 could
be significantly below our previous base-case expectations." she added.
It said Winsway's cash flow protection will likely remain weak in 2013, due to depressed
coal prices, high inventory, and the uncertain ramp-up of a new coal mine in Canada. In
our opinion, the company's business model of back-to-back contracts with customers has not
protected Winsway from its exposure to coal-price volatilities. (KL)