Thai Rating and Information Services Co., Ltd. (TRIS) announced Tuesday 13 March 2001 that it affirmed a "BBB+" rating to Acumen Co., Ltd.'s (Acumen) Bt3,500 million senior secured debentures. The rating continues to reflect the company's stable revenue stream from the Telephone Organization of Thailand (TOT) through 2006. Strong covenants covering the revenue assignment from the TOT and pledges of the company's Debt Service Account and Sinking Fund Account for payment of interest and principal provide comfortable protection for debentureholders. Covenants limiting the financial support Acumen can provide to other companies in the Jasmine Group also ensure adequate risk protection. However, the rating recognizes the weak financial status of Acumen's parent company, Jasmine International PLC (JI).
TRIS reported that Acumen, a 100% subsidiary of JI, received nine- to 12-year lease contracts, which end in 2006, from the TOT to operate Rural Long-Distance Public Telephone Projects. Revenues from these projects, which contributed almost 80% of the company's yearly Bt1,900 million revenue, are fixed payments from the TOT throughout the lives of the contracts. The company has also been awarded another two 15-year concessions from the TOT for satellite communication services, namely Time Division Multiple Access (TDMA) and Integrated Satellite Business Network (ISBN) project. The revenue stream for the TDMA project has also been secured until the end of the concession, while the 80:20 (Acumen:TOT) revenue sharing scheme of the ISBN project exposes the company to the market uncertainties of the VSAT business. Though the revenue streams for the Rural Telephone Projects are certain, the upside for project expansion is limited.
In December 1999, Acumen issued five-year Bt3,500 million debentures to refinance its foreign currencies-loaded debts, thus reducing its exposure to currency risk and interest rate fluctuation. Company debts gradually decreased, and reached Bt3,212 million for the period ended September 2000. In contrast, its debt-to-capitalization ratio rose to 73.37% from 70.78% in 1999, because of a sizeable proposed dividend payout in 2000. Going forward, TRIS will closely monitor the discipline related to Acumen's dividend payout policy. Given that Acumen's revenue patterns are relatively fixed, its operating performance has been stable and predictable. At the end of Q3/2000, its operating margin (before depreciation and amortization) returned to 70.43% following an extraordinary year of expenses that put the margin at 59.13% in 1999. The EBITDA interest coverage was passable at 4.97 times for the period ended September 2000. Based on TRIS's formula, the debt service coverage ratio (DSCR), which includes the sinking fund (minus cash), should be in a comfortable range of 1.3 times to 1.5 times in the next two years.
TRIS noted that under the debt restructuring deal JI concluded in July 2000, Acumen's parent has to repay Bt360 million in 2001, and about Bt1,329 million per annum during 2002 to 2006. Funds for repayment are anticipated to come mainly from JI's cash-generating subsidiaries led by Acumen and Jasmine Submarine Telecommunications Co, Ltd.
Acumen Co., Ltd. (Acumen) Issue Rating ACUMEN#1: Bt3,500 million senior secured debentures due 2004 Affirmed at BBB+
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TRIS reported that Acumen, a 100% subsidiary of JI, received nine- to 12-year lease contracts, which end in 2006, from the TOT to operate Rural Long-Distance Public Telephone Projects. Revenues from these projects, which contributed almost 80% of the company's yearly Bt1,900 million revenue, are fixed payments from the TOT throughout the lives of the contracts. The company has also been awarded another two 15-year concessions from the TOT for satellite communication services, namely Time Division Multiple Access (TDMA) and Integrated Satellite Business Network (ISBN) project. The revenue stream for the TDMA project has also been secured until the end of the concession, while the 80:20 (Acumen:TOT) revenue sharing scheme of the ISBN project exposes the company to the market uncertainties of the VSAT business. Though the revenue streams for the Rural Telephone Projects are certain, the upside for project expansion is limited.
In December 1999, Acumen issued five-year Bt3,500 million debentures to refinance its foreign currencies-loaded debts, thus reducing its exposure to currency risk and interest rate fluctuation. Company debts gradually decreased, and reached Bt3,212 million for the period ended September 2000. In contrast, its debt-to-capitalization ratio rose to 73.37% from 70.78% in 1999, because of a sizeable proposed dividend payout in 2000. Going forward, TRIS will closely monitor the discipline related to Acumen's dividend payout policy. Given that Acumen's revenue patterns are relatively fixed, its operating performance has been stable and predictable. At the end of Q3/2000, its operating margin (before depreciation and amortization) returned to 70.43% following an extraordinary year of expenses that put the margin at 59.13% in 1999. The EBITDA interest coverage was passable at 4.97 times for the period ended September 2000. Based on TRIS's formula, the debt service coverage ratio (DSCR), which includes the sinking fund (minus cash), should be in a comfortable range of 1.3 times to 1.5 times in the next two years.
TRIS noted that under the debt restructuring deal JI concluded in July 2000, Acumen's parent has to repay Bt360 million in 2001, and about Bt1,329 million per annum during 2002 to 2006. Funds for repayment are anticipated to come mainly from JI's cash-generating subsidiaries led by Acumen and Jasmine Submarine Telecommunications Co, Ltd.
Acumen Co., Ltd. (Acumen) Issue Rating ACUMEN#1: Bt3,500 million senior secured debentures due 2004 Affirmed at BBB+
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