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S&P: Thai Bev on watch
Standard & Poor's said it placed the BBB long-term corporate credit rating on Thai Beverage PCL on CreditWatch with negative implications, along with its axA Asean regional scale rating.
The CreditWatch placement reflects an expectation that Thai Beverage's proposed debt-funded acquisition will weaken its financial risk profile, which is currently assess as modest, over the next 24 months, S&P said.
Thai Beverage intends to acquire a 22% stake in Fraser and Neave Ltd. for S$2.8 billion.
Thai Beverage's debt-to-EBITDA ratio could weaken to about 3.2x in 2012, following the acquisition, from 1x in 2011, S&P said.
The proposed acquisition is unlikely to positively influence the satisfactory assessment of the company's business risk profile for the next 24 months at least, the agency added.
S&P said it believes commercial synergies of the acquisition could take time to materialize, particularly given Thai Beverage's minority stake.
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