S&P turns Far East outlook to negative

S&P said it changed its outlook on Far East Horizon Ltd. to negative from stable and affirmed its BBB- ratings on the issuer and its senior unsecured debt.

The weaker outlook follows the news that Kong Fanxing, chief executive officer of the company, will succeed Ning Gaoning, the former chairman of Sinochem, as FEH's chairman of the board of directors, the agency said. Ning will continue to serve as a non-executive director.

This appointment means that for the first time since FEH was listed in 2011, a senior representative of Sinochem will no longer chair FEH's board but will keep its two seats on FEH's board, S&P said.

“We believe this change signals a weakening of FEH's link to Sinochem. It puts downward pressure on FEH's moderate strategically important role to Sinochem, and on the likelihood of the company receiving extraordinary group support if needed. FEH had $550 million in convertible bonds outstanding as of end-June 2022. Sinochem's holding could dilute to 18.95% from 21.31% if all convertible bonds are converted,” S&P said in a press release.

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