Moody's may downgrade Asia Aluminum

Moody's Investors Service said it placed Hong Kong-based Asia Aluminum Holdings Ltd.'s Ba3 corporate family and senior unsecured bond ratings on review for possible downgrade following the company's request to suspend its shares trading pending the release of an announcement in relation to the proposed privatization of the company.

Moody's said it is concerned that the controlling shareholder may use Asia Aluminum's current cash reserve to partly fund its privatization, subject to existing bond covenant, such that the company's liquidity position may weaken.

In this review, the agency said it will evaluate how the privatization is funded and the associated financial policy, including future dividend distributions, business strategy, as well as its information disclosure and corporate governance practice post-privatization.

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