Fitch places S.F. Holding on watch

Fitch Ratings said it placed S.F. Holding Co., Ltd.’s A- long-term issuer default rating and senior unsecured rating on rating watch negative following its proposed acquisition of a controlling stake in Kerry Logistics Network Ltd.

The A- rating on its outstanding bonds, issued by subsidiary SF Holding Investment Ltd. was also placed on rating watch negative.

SF plans an A-share placement with expected proceeds of CNY 22 billion to help pay for the transaction. “This amount and the company’s strong FFO generation would be more than enough to offset the leverage impact that the acquisition would have. However, if the transaction were to proceed without the A-share placement, Fitch would consider negative rating action due to higher leverage,” Fitch said in a press release.

“We will resolve the rating watch negative upon clarity about the company’s financial position at or prior to the completion of the transaction,” Fitch said.

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