TRIS Rating places CreditAlert with a ?negative? implication on the company and issue ratings on Central Pattana PLC (CPN). The CreditAlert follows CPN?s announcement on 5 July 2021 for its intention to purchase 30.36% stake in Siam Future Development PLC (SF) from Major Cineplex Group PLC (MAJOR). The transaction is worth THB7.8 billion. After the completion of the transaction, CPN will be required to make a tender offer for the remaining shares in SF. In the event of CPN acquiring the entire outstanding shares of SF, the transaction could amount to THB25.6 billion. CPN plans to fund this acquisition by debt.
SF is a leading community mall developer in Thailand. Currently, SF owns and operates 18 shopping centers, including its 49% stake in super regional mall: ?Mega Bangna?. SF reported rental and service income of THB1.1-THB1.5 billion per annum during the past five years with an annual shared profit from its joint ventures of THB1.2-THB1.8 billion. The transaction is subject to the results of due diligence and the approval of MAJOR?s shareholders, in the extraordinary meeting scheduled in late August 2021.
We assess that the acquisition will strengthen CPN?s retail property portfolio, especially in the Bangna area. However, given the acquisition will likely to be funded by debt, the acquisition raises our concern over a potential deterioration in CPN?s financial profile.
We will resolve the CreditAlert once the tender offer has been finalized and we have thoroughly assessed CPN?s deleverage plan and the full impact of the SF acquisition on CPN?s credit profile.
- Issue Rating Criteria, 15 June 2021
- Rating Methodology ? Corporate, 26 July 2019
- Key Financial Ratios and Adjustments, 5 September 2018
Company Rating: AA Issue Ratings: CPN218A: THB1,900 million senior unsecured debentures due 2021 AA CPN21OA: THB300 million senior unsecured debentures due 2021 AA CPN221A: THB1,000 million senior unsecured debentures due 2022 AA CPN225A: THB1,500 million senior unsecured debentures due 2022 AA CPN235A: THB2,000 million senior unsecured debentures due 2023 AA CPN241A: THB2,000 million senior unsecured debentures due 2024 AA CPN242A: THB3,000 million senior unsecured debentures due 2024 AA CPN258A: THB1,000 million senior unsecured debentures due 2025 AA CPN261A: THB1,250 million senior unsecured debentures due 2026 AA CPN261B: THB750 million senior unsecured debentures due 2026 AA Up to THB3,000 million senior unsecured debentures due within 15 years AA CreditAlert: Negative TRIS Rating Co., Ltd./www.trisrating.com Contact: santaya@trisrating.com, Tel: 0-2098-3000/Silom Complex Building, 24th Floor, 191 Silom Road, Bangkok 10500, Thailand ? Copyright 2021, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution, or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited, without the prior written permission of TRIS Rating Co., Ltd. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient?s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information. All methodologies used can be found at http://www.trisrating.com/en/rating_information/rating_criteria.html.