Moody’s lowers Sime Darby

Moody's Investors Service said it placed on review for downgrade the Baa1 issuer rating of Sime Darby Bhd., along with the Baa1 senior unsecured debt rating on the sukuk issued by Sime Darby Global Bhd., a wholly-owned and guaranteed subsidiary.

The downgrade review follows news that Sime Darby plans to list its plantation and property businesses, Moody’s said.

The agency also said it placed on review for downgrade the provisional Baa1 rating on the senior unsecured medium-term note program of Sime Darby Global Bhd.

In January, Sime Darby announced plans to create three standalone businesses by listing its plantation and property divisions on Bursa Securities Malaysia, while retaining its motors and industrial divisions under the existing Sime Darby Bhd. company, Moody’s explained.

While there is no clarity on how the plan will be implemented, the agency said it believes the listing of the plantation and property businesses will lead to reduced diversification, scale and cash flows, and therefore a weaker credit profile.

The review will assess the specifics of the transaction once details are known, Moody’s said, along with how existing debt will be allocated across the three entities, financial policy changes, capital structure, cash flow and liquidity profiles.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.