Standard & Poors Describes Positive Prospect for China's BaoshanInternational rating agency, Standard & Poors, has retained its BB+ credit rating for China's Baoshan Iron & Steel Group in its latest rating report and has adjusted the prospect of the company from negative to positive.Analysts said this indicates that concern in the international market over the possible adverse effect of the company's merger with the Shanghai Metallurgy and the Meishan Iron and Steel Company is fading. A press released by Standard & Poors said the positive prospect reflects improved operation and finance of the group after the merger. Should the group consolidate its market position and secure profits from the operation of the Shanghai Metallurgy and the Meishan company, its rating can be raised further, according to the rating agency. In its first assessment of the group in 1997, Standard & Poors gave Baoshan a BBB+ rating, the same as the sovereignty credit rating of China. The rating was reduced to BB+ with a negative prospect in 1999, following the merger the previous year, reflecting investors' concern that drastic debt and the increase of employees because of the merger would drag down the steel giant. |
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