Fitch puts BankThai on evolving watch

Fitch Ratings placed BankThai plc's support rating of 4 on Rating Watch evolving, pending the completion of a planned further capital raising and possible dilution of the Financial Institutions Development Fund's 42% stake over the next few months.

The bank recently said the fund had entered into a sales agreement with Malaysia's CIMB Group Sdn Bhd. to divest its 42% stake for about 5.9 billion in Thai baht. The sale is subject to approvals.

If completed, Fitch said it will likely affirm the support rating, and could upgrade the rating if CIMB acquires a majority stake through a subsequent required tender offer.

If the sale is not completed, the support rating will likely remain on evolving watch pending clarification of state support for a further recapitalization, which is needed to restore the bank's financial strength, the agency said.

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