Moody's Investors Service changed the outlook on China Glass Holdings Ltd's 'B1' corporate family and senior unsecured ratings to negative and affirmed the ratings, after the company said the local authority in Weihai, China, is to resume the land use rights in relation to certain production lines of China Glass' subsidiary, Weihai Blue Star Glass Co Ltd, with compensation of 360 mln yuan.
The negative outlook reflects the uncertainties with regard to how quickly China Glass can recover its upfront relocation expenditure, the magnitude of the uncompensated revenue loss due to production disruptions and re-ramping of the relocated production lines, and potential delay in the plant relocation, Moody's said.
The ratings are underpinned by the company's leading position in glass manufacturing in China,a diversified product range, and an experienced management team, the rating agency said.