...HONG KONG (Standard & Poor's) Oct. 15, 2015--Standard & Poor's Ratings Services today said that its ratings on Texhong Textile Group Ltd. (##-/Stable/--; cnBB+/--) are not affected by the company's plans to acquire an additional 40% equity interest in, and thus consolidate, a new startup yarn production company in Xinjiang. Our rating already reflects the potential risks related to the transaction. At the same time, the Xinjiang startup's plan to scale down capacity expansion will partially alleviate pressure on Texhong's cash outflow, in our view. We have already reflected the risks of potential deterioration in debt leverage and cash flow adequacy due to aggressive capacity expansion, potential cost overruns, and operational challenges related to the startup company in our rating. Although our base case did not consolidate the Xinjiang entity, we have captured the risks in our "negative" assessment of our comparable rating analysis modifier. In our view, Xinjiang's move to scale down...
