Standard & Poor’s places SIRVA’s ratings on ?watch negative?

Standard & PoorÆs places SIRVAÆs ratings on æwatch negativeÆ    Standard & Poor's Ratings Services in New York has placed its ratings on SIRVA Inc, parent entity of several trucking companies, on CreditWatch with negative implications — including SIRVA's 'BB' corporate credit rating.
   The 'watch negative' status followed SIRVA's announcement Tuesday that 'charges related to its insurance and European businesses will be higher than previously anticipated, that it's year-end financial statement will be delayed, and that it will incur significant expenses in 2005 to address financial control weakness,' Standard & Poor's Ratings Services said in a statement.
   SIRVA has increased its estimate of extraordinary charges to $33 million from its previously disclosed range of $21 million to $25 million. 'The company has also stated that it will likely spend $35 million to $40 million in 2005 to finalize its restatements,' S&P noted.
   Accordingly, SIRVA now estimates a net loss of $8 million in the fourth quarter of 2004, and net income of $37 million for fiscal 2004, 'a decline from previous guidance,' Ratings Services explained.
   SIRVA, based in Westmont, Ill., had $675 million of lease-adjusted debt last Sept. 30. S&P said its ratings on SIRVA (formerly Allied Worldwide Inc.) and SIRVA Worldwide Inc., whose primary operating subsidiary is North American Van Lines, Inc., reflect 'a significant debt burden from various acquisitions, participation in the low-margin relocation business, and an active, ongoing acquisition program. Positive credit factors include the strong market presence of the company's northAmerican, Allied and Pickfords brands,' Ratings Services said.
   'In November 2004, SIRVA announced a 5 percent decrease in net revenues for the third quarter in its non-North American relocation segments. The decline was due to deteriorating market fundamentals in Europe, where SIRVA had concentrated a large portion of its acquisition efforts in the last few years. The company appointed a new president of its European operations and curtailed capacity, but margins have continued to declined,' Standards & Poor's Ratings Services said. The exact extent of the earnings pressure has not been disclosed, although details are expected in SIRVA's eventual fourth-quarter financial statements.