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Moody's upgrades Hankyu's long-term debt-rating outlook.

TOKYO, Aug. 1 Kyodo

Moody's Investors Service Inc. said Thursday it has upgraded the outlook on its Baa1 senior unsecured long-term debt rating for Hankyu Corp., a major railway operator based in Osaka, from negative to stable.

''The outlook change recognizes the progress of consolidation and restructuring of Hankyu's group-wide operations, and the resultant stabilizing of its financial position and performance,'' the U.S. credit-rating agency said.

''Hankyu has streamlined its hotel operations, including the recent amalgamation of the Dai-ichi and Hankyu hotel groups, with the aim of higher operating and management efficiency,'' Moody's said.

''Hankyu is also reorganizing its real-estate operations within the group and intends to segregate and streamline operational functions (investment, asset and property management, and residential development) and focus more on management functions.''

It said Hankyu has been withdrawing from unprofitable business such as rolling-stock manufacturing and the operation of two amusement parks. The company is also cutting costs at its underperforming travel agency subsidiary.

With its restructuring and cost-cutting efforts likely to improve profitability, Moody's said it ''expects Hankyu to be able to reasonably manage its financial position and performance over the intermediate term.''
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Publication:Japan Weekly Monitor
Geographic Code:9JAPA
Date:Aug 5, 2002
Words:189
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