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Fitch downgrades China's food delivery giant Meituan, slaps on 'junk' warning

Fitch downgrades China's food delivery giant Meituan, slaps on 'junk' warning

FILE PHOTO: A Meituan delivery worker wearing a face mask is seen on a street following an outbreak of the coronavirus disease (COVID-19) in Shanghai, China January 13, 2021. REUTERS/Aly Song/File Photo

LONDON: Credit rating firm Fitch downgraded China's food delivery giant Meituan to "BBB-" from "BBB" on Friday (Sep 10) and immediately warned it that it could be demoted to "junk".

"The downgrade reflects the greater regulatory uncertainty facing Meituan," Fitch said in a statement explaining the downgrade.

Meituan, China's eighth largest company by market value, has faced regulatory heat as authorities crack down on the country's sprawling platform economy.

Fitch said factors that could lead to another downgrade included further government, regulatory or legal intervention that hurt its operating and business model, sustained EBITDA losses beyond this year as well further rises in debt.

Source: Reuters/vc

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