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Can't Move It

16 November 2017 by lberuti

As recently as September, GKNLN ( GKN Plc ) said that Kevin Cummings, who has led GKNLN’s aerospace division for almost four years, would be handed the top post at the company and would become its next Chief Executive. It is fair to say that the market was taken by surprise this morning by the announcement that he had left the company six weeks before he even took the job. At the same time, the company revealed that further write-offs at North American plants making parts for Airbus, helicopter producer Sikorsky and Honda Motor’s new business jet arm would be made and could total as much as GBP130mln. The whole story comes a few weeks after a profit warning that was partly explained by the weak performance at the aerospace division. The abrupt departure unsurprisingly fueled real concerns about more skeletons in the company's North American aerospace closet. But while the stock reached a 16-month intraday low and closed almost 5% lower, the 5-year risk premium of GKNLN, which was initially marked 10bps wider, ended the session a mere 3bps wider at 103bps, still a good distance away from the 188bps level it reached in June 2016. In Europe, any credit which is not distressed seems unmovable at the moment