Ratings agency Fitch has downgraded state-owned arms manufacturer Denel’s long-term credit rating. Fitch Ratings has downgraded Denel national long-term rating to 'B(zaf)' from 'AA-(zaf)' and national short-term rating to 'B(zaf)' from 'F1+(zaf)'. "Fitch has placed the ratings on rating watch negative,” the agency said in a statement Monday. In its statement, Fitch said Denel’s downgrade was a result of evaluation of much weaker government support. “This has been exacerbated by the short-term nature of the capital structure, which has restricted liquidity and in turn has negatively impacted divisional abilities to deliver on operational projects,” Fitch said. “Denel continues to benefit from sovereign support through the government's irrevocable and unconditional guarantee for R3.4bn of Denel's R4bn domestic medium-term notes. While this guarantee framework has now been extended to 29 September 2023, it has clearly not been sufficient to address operational requirements and debt fun...

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