TRIS Rating Co., Ltd. announces today that it has placed CreditAlert with “negative” implications for the company
rating of Rojana Industrial Estate PLC (Rojana) as well as the company and issue ratings of TICON Industrial Connection PLC
(TICON). The rating action follows the severe flooding in Rojana Industrial Park in Ayudhya province and many areas in
Thailand, including the operating sites of TICON, since 8 October 2011.
TRIS Rating reported that the heavy rainfall has led to flooding in many areas in Thailand since August 2011. The
severe flooding began to hit Ayudhya province in the beginning of October 2011 and flood waters have since inundated
several industrial estates in Ayudhya, including Rojana Industrial Park, the main industrial estate of Rojana. Despite the
6.5-meter high earthen dikes protecting the Rojana Industrial Park, the estate was still flooded. All companies in the
industrial park have stopped operations. Rojana’s 267 megawatt (MW) gas-fired power plants, located in Rojana Industrial
Park, halted operations and Rojana declared force majeure to all parties concerned. The floods will weaken the financial
profile of Rojana inevitably as the power plants, which generated 60% of total revenue in the first half of 2011, will
likely to cease operation for three to six months after the flood water recedes. However, the damage will be partly
alleviated under the property damage insurance and business interruption insurance. The severity of the effect to Rojana’s
credit rating will depend on the length of flooding period, the time needed to resume operations of all customers in the
industrial park, and the capital expenditures needed to repair the power plants and the infrastructure in the industrial
park.
TRIS Rating said, on 11 October 2011, TICON announced that all factories and warehouses for rent, located in
Rojana Industrial Park, were flooded. The flooded properties comprised 30 factories and three warehouses totaling 107,324
square meters (sq.m.). As of September 2011, TICON’s total leased area was 514,025 sq.m. and located in 13 locations. The
flooded area accounted for 21% of TICON’s total leased area and contributed 22% of total rental revenue in the first half
of 2011. However, TICON’s factories and warehouses for rent located in other industrial estates, such as Hi-Tech
Industrial Estate and Navanakorn Industrial Promotion Zone, continue to expose to the risk of flooding as the situation is
not stabilized. The damage will be partly alleviated by the property damage insurance of leased factories and warehouses.
The severity of the floods to TICON’s credit profile will depend on the length of flooding period and the time needed to
resume operations of the customers in the flooded area.
TRIS Rating will closely monitor the flooding situation and conduct an extensive analysis to determine the full
impact of the flooding on the creditworthiness of Rojana and TICON. The CreditAlert will be resolved once the damage
assessment is finalized. -- End
CREDITALERT DESIGNATION: NEGATIVE Company Rating: A- Ticon Industrial Connection PLC (TICON) CREDITALERT DESIGNATION: NEGATIVE Company Rating: A Issue Ratings: TICON128A: Bt650 million senior debentures due 2012 A TICON165A: Bt650 million senior debentures due 2016 A
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