S&P puts Asia Aluminum on negative watch

Standard & Poor's said it placed Hong Kong-based Asia Aluminum Holdings Ltd.'s BB corporate credit rating and BB $450 million senior unsecured notes due 2011 on CreditWatch with negative implications.

The rating actions follow an announcement that the company's chairman and controlling shareholder, Kwong Wui Chun, with the support of several management executives, has made a preliminary approach to take the company private. The chairman and his associates hold a 35.41% stake.

Although the bond covenants have restrictions on dividend payments, asset transfers and additional debt at Asia Aluminum, S&P said it is concerned that the leverage of the overall group could increase significantly as a result of a leveraged management buy-out.

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