TRIS Rating has downgraded the company rating of Nation Multimedia Group PLC (NMG) to “BB+” from “BBB” and places the company rating of NMG on CreditAlert with “negative” implication. The rating action takes into account NMG's exposure to operational and legal risk which may make NMG unable to meet upcoming financial obligations.
The rating action follows an order recently sent to NMG by the Securities and Exchange Commissionor SEC (SEC letter No. GorLorTor. Fhorkor. 1811/2559, dated 6 October 2016). The SEC ordered NMG to suspend eight board members from their duties. The eight board members are being prosecuted in court for failing to perform their duties in accordance with the law at NMG’s 2015 annual general meeting of shareholders. The SEC order means the eight board members have to stop their duties as directors or executives of NMG and its subsidiaries, effective from 6 October 2016 and lasting until the court case is resolved.
The SEC order causes a major interruption in NMG's operations and may result in the company's inability to meet its financial obligations. NMG has outstanding bills of exchange (B/E) worth Bt100 million due on 12 October 2016, and Bt250 million in B/E coming due between now and the end of December 2016.
If NMG's has no clear action to resolve the matter, the company credit rating will be downgraded to “D”, on 12 October 2016, the due date of the B/E.
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