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Fitch cuts Harsco outlook
Fitch Ratings said it affirmed Harsco Corp.'s long-term issuer default rating at BBB+ and the short-term IDR at F2 and revised the outlook to negative from stable.
Fitch said the revision in outlook reflects the negative effect of continued weakness in Europe's economy on Harsco's Infrastructure segment and slowing global economic growth. In addition, free cash flows in 2012, per Fitch's definition, are likely to be negative due to cash restructuring charges and approximately $300 million in capital spending.
Free cash flows could be breakeven or slightly positive by year-end if the European economy stabilizes and demand improves faster than anticipated at either the Harsco Infrastructure or Harsco Metals & Minerals businesses.
Further downward revisions in the ratings could occur if metrics weaken further because of business conditions declining or the company materially increasing its outstanding debt, Fitch said.
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