MILAN, June 25 (Reuters) - Moody's will only raise Fiat's credit rating if the industrial group shows significant improvement in operating cash flow and that will take time, an executive at the credit ratings agency said on on Friday.
In July last year, Moody's cut Fiat's rating deeper into non-investment "junk" grade to Ba3 with a negative outlook as the company struggled to turn round its loss-making car arm in the face of fierce competition.
"The possibility of an improvement in rating must be supported by a significant improvement in operating cash flow which requires time," European corporate finance managing director Michael West told reporters in Milan.
"We want to see cashflow growth through growth in Fiat's market share and the introduction of new models," he added.
West said Moody's attention was focused on Fiat's cash-generating activities: car division Fiat Auto, agricultural equipment-maker CNH and truck producer Iveco.
Moody's was also seeking reassurance from Fiat's new management, led by recently installed Chairman Luca di Montezemolo, on the group's restructuring plan.
"After the recent changes (in management) we are looking for confirmation of whether management strategy forecasts a further reduction in debt," he added.