S&P rated B+ for G-Steel's credit rating

The CreditWatch action reflects continued pressure on the company's liquidity position and a delay in the refinancing of a US$120 million syndicated bank bridging facility.

 Although G Steel expects to make progress in discussions with its banks on renewing the syndicated bank facility in the next few weeks, refinancing may be delayed beyond the extension period of Oct. 30, 2007. Despite that, G Steel continues to have the capacity to meet scheduled interest payments from cash reserves and operating income. However, the company does not have the capacity to internally fund full redemption of the bank facility without raising external funding. In addition, G Steel's key financial metrics could be stretched if financing costs escalate following its refinancing of US$120 million bank facility.

 Standard and Poor's expects to resolve the CreditWatch status after further discussions with G Steel management on the refinancing of the bank facility and a fuller assessment of the company's financial position through the third quarter of 2007. Higher financing costs or failure to refinance the bank facility ahead of the maturity date will most likely result in the rating on G Steel being lowered.  

- The Nation