TRIS Rating has held the view that the potential change in major shareholder from Solvay Group to Asahi Glass Co., Ltd. (AGC), has no immediate impact on the rating of Vinythai PLC (VNT).
On 14 December 2016, VNT announced that Solvay Group, the major shareholder, agreed to sell its 58.77% stake in VNT to AGC, at a transaction value of approximately Bt10,448 million. The share acquisition is expected to be completed within the first half of 2017, subject to the fulfillment of condition precedents, including antitrust clearances from relevant jurisdictions. Following the completion of the sale, AGC will be required to conduct a tender offer for all remaining shares of VNT.
In TRIS Rating's view, with AGC’s experiences in the regional chlor-alkali business, the change in major shareholders should not affect business continuity of VNT. However, if there is a significant change in the financial policies or capital structure of VNT, its rating might be affected. TRIS Rating will closely monitor any changes in VNT's strategic direction and financial policies after AGC takes control of the company.
AGC is a world-leading manufacturer of glass, chemicals, and high-tech materials in Japan. AGC offers a wide variety of products that can be grouped into three segments: glass (flat and automotive glass), electronics (glass substrates for LCD displays and electronic materials), and chemicals (chlor-alkali, fluorochemicals, and specialty chemicals). AGC’s full-year revenue in 2015 was about 1.3 trillion yen, drawn from over 30 countries. The glass segment contributed about 52% of total sales, following by electronics (22%) and chemicals (24%). AGC’s acquisition of a large stake in VNT is congruent with its business strategy to strengthen production bases of chlor-alkali business in Southeast Asia. AGC currently operates two polyvinyl chloride (PVC) plants in Indonesia and Vietnam and a caustic soda plant in Thailand. After the acquisition is completed, AGC’s capacity in Southeast Asia will increase to almost one million tonnes of PVC per year and about 1.4 million tonnes of caustic soda per year.
Currently, VNT is assigned a “A-” rating with “stable” outlook by TRIS Rating, while AGC is assigned a “A-” rating (International scale), by Standard & Poor’s.