Fitch downgrades Calik

Fitch Ratings said it downgraded Calik Holding AS' long-term foreign- and local-currency issuer default ratings to B- from B, its national long-term rating to BBB(tur) from BBB+(tur), Globus Capital Finance SA's $200 million 8½% notes due 2012 to B-/RR4 from B/RR4 and GAP Guneydogu Tekstil AS' national long-term rating to BBB+(tur) from A-(tur).

The ratings have been removed from Rating Watch negative. The outlook is negative for Calik and stable for GAP.

The downgrade is based on Fitch's concerns about the financial impact of the company's acquisition of Sabah-ATV's media assets on the overall group financial profile and the diversion of the group from its previously stated strategy of focusing growth on its energy businesses. The agency is also concerned regarding the liquidity needs of the media business and energy-generation projects.

The negative outlook reflects downside risks associated with expected operating performance in 2009/2010 mainly in the media division. Fitch remains concerned that deleveraging will be hard to achieve in a lower ad-spend environment in 2009 and, possibly, in 2010 due to the slowdown in the Turkish economy.

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