TRIS Rating Places a “Negative” CreditAlert on Company & Senior Unsecured

TRIS Rating places CreditAlert with a “negative” implication on the “A” company rating and issue ratings on Frasers Property (Thailand) PLC (FPT). The CreditAlert assignment follows the announcement on 25 February 2019 that FPT will make a voluntary tender offer for all securities of Golden Land Property PLC (GOLD) at the offering price of Bt8.5 per share, totaling Bt19,751.62 million. The acquisition will be funded by internal cash flow, bank loan, and debenture issuance. The tender offer period will end in July 2019.

Given the sizeable debt-funded financing, the acquisition debt will potentially pressure FPT’s leverage and weaken its financial risk profile. Meanwhile, the cyclical and competitive nature of residential property development which is GOLD’s main business line could negatively impact on FPT’s business profile.

Currently, GOLD is held 39.92% by Frasers Property Holdings (Thailand) Co., Ltd. (FPHT), 39.28% by Univentures PLC (UV), and 20.8% by the minority shareholders. FPHT is also the largest shareholder of FPT, holding 40.95% of FPT’s shares. FPT is viewed as a strategically important subsidiary of FHPT. FPHT is a wholly-owned subsidiary of Frasers Property Ltd.

The percentage of FPT’s shareholding in GOLD at the end of the transaction is still unclear at this point of time. FPT should be able to acquire at least 39.92% stakes in GOLD from FPHT, while the acquisition of 39.28% shares of GOLD that held by UV still needs consent from at least 75% of the minority shareholders of UV. Moreover, FPT has to tender from the minority shareholders of GOLD for the remaining 20.8% shares of GOLD.

Thus, TRIS Rating will resolve the CreditAlert once the tender offer has already been finalized and the impact from this transaction on FPT’s creditworthiness has been thoroughly analyzed.

RELATED CRITERIA

- Key Financial Ratios and Adjustments, 5 September 2018

- Group Rating Methodology, 10 July 2015

- Rating Methodology – Corporate, 31 October 2007

Frasers Property (Thailand) PLC (FPT)

Company Rating: A

Issue Ratings:

TICON195A: Bt1,000 million senior unsecured debentures due 2019 A

TICON19OA:Bt620 million senior unsecured debentures due 2019 A

TICON205A: Bt500 million senior unsecured debentures due 2020 A

TICON205B: Bt100 million senior unsecured debentures due 2020 A

TICON208A: Bt600 million senior unsecured debentures due 2020 A

TICON213A: Bt1,500 million senior unsecured debentures due 2021 A

TICON217A: Bt800 million senior unsecured debentures due 2021 A

TICON225A: Bt1,000 million senior unsecured debentures due 2022 A

TICON229A: Bt1,000 million senior unsecured debentures due 2022 A

TICON233A: Bt2,500 million senior unsecured debentures due 2023 A

TICON235A: Bt2,300 million senior unsecured debentures due 2023 A

TICON238A: Bt700 million senior unsecured debentures due 2023 A

TICON283A: Bt1,000 million senior unsecured debentures due 2028 A

FPT213A: Bt2,000 million senior unsecured debentures due 2021 A

FPT222A: Bt2,300 million senior unsecured debentures due 2022 A

FPT242A: Bt500 million senior unsecured debentures due 2024 A

FPT292A: Bt200 million senior unsecured debentures due 2029 A

CREDITALERT: Negative

TRIS Rating Co., Ltd./www.trisrating.com

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TRIS Rating Places a “Negative” CreditAlert on Company & Senior Unsecured Debt Ratings of “FPT”