Thai Rating and Information Services Co., Ltd. (TRIS) announced Thursday 17 May 2001 that it has assigned "BBB+" ratings to Central Pattana PLC's (CPN) corporate and Bt1,500 million senior debentures. The ratings reflect CPN's position as a leading shopping center developer with an experienced management team, diverse locations of its shopping centers, variety of tenants and its good quality services to retailers. However, the rating is limited by the higher competition in the retail property development industry since the economic crisis by the entry of foreign-owned and operated superstores.
According to TRIS's report, CPN was established in 1980 under the name "Central Plaza Co., Ltd." to invest in a mixed-use complex in Bangkok. The Chirathivat family from the Central Group currently holds a majority of shares: 29.25% through Central Holding Co., Ltd. and 41.48% through family members. CPN is a market leader in the shopping center development industry with total rentable space of around 259,530 sq.m. CPN develops, operates and manages six shopping centers, two office buildings, one apartment building, four food center businesses, and provides management services within the group. In 2000, major sources of revenues were from rental and service income (80.8%) and food and beverage (12.5%). CPN's management team has long experience and is well-recognized in the industry. Management uses magnet attractions, such as Central Department Stores, cinemas, bowling alleys, supermarkets, brand name shops and large multipurpose halls, and zoning the tenant mix, such as apparel shops and restaurants, to stimulate consumer traffic. The company collects market information to ensure tenants' demands are met and maintains close business relationships with retailers by providing good quality services covering sales promotion and frequent meetings with retailers.
TRIS said that the economic crisis in 1997 forced many retailers to shutdown, while the remaining units have had to renovate and reposition themselves. Attractive shopping centers have improved their occupancy rates, while non-attractive centers continue to have difficulties in securing tenants. To remain competitive in the market, retail property developers, including CPN, have worked to focus on better quality products and services at lower prices as well as to improve their activities in terms of concept, design and operations.
CPN's financial status during 1998-2000 can be characterized as average with high profitability and slightly low cash flow protection, TRIS said. The company recorded high operating income as a percentage of revenues more than 50%, during the past three years. Pretax return on permanent capital climbed from 8.2% in 1998 to 11.0% in 2000 mainly as a result of improved occupancy rates and decreases in rental discounts in some projects after the economic crisis. EBITDA interest coverage ratio improved from 2.1 times in 1998 to 3.7 times in 1999 and 4.0 times in 2000. Funds from operation-to-total debt also increased from 18.1% in 1998 to 19.2% in 1999 and 19.3% in 2000. CPN plans to issue five-year debentures worth not more than Bt1,500 million in the first half of 2001 to finance capital expenditures and working capital in the existing projects. As of 31 January 2001, it recorded acceptable outstanding debt burden: long-term loans amounted to Bt3,826 million and short-term loans outstanding were Bt314 million, TRIS said.
Central Pattana PLC (CPN) Company Rating Senior debt BBB+ Issue Rating CPN066A: Up to Bt1,500 million senior debentures due 2006 BBB+
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According to TRIS's report, CPN was established in 1980 under the name "Central Plaza Co., Ltd." to invest in a mixed-use complex in Bangkok. The Chirathivat family from the Central Group currently holds a majority of shares: 29.25% through Central Holding Co., Ltd. and 41.48% through family members. CPN is a market leader in the shopping center development industry with total rentable space of around 259,530 sq.m. CPN develops, operates and manages six shopping centers, two office buildings, one apartment building, four food center businesses, and provides management services within the group. In 2000, major sources of revenues were from rental and service income (80.8%) and food and beverage (12.5%). CPN's management team has long experience and is well-recognized in the industry. Management uses magnet attractions, such as Central Department Stores, cinemas, bowling alleys, supermarkets, brand name shops and large multipurpose halls, and zoning the tenant mix, such as apparel shops and restaurants, to stimulate consumer traffic. The company collects market information to ensure tenants' demands are met and maintains close business relationships with retailers by providing good quality services covering sales promotion and frequent meetings with retailers.
TRIS said that the economic crisis in 1997 forced many retailers to shutdown, while the remaining units have had to renovate and reposition themselves. Attractive shopping centers have improved their occupancy rates, while non-attractive centers continue to have difficulties in securing tenants. To remain competitive in the market, retail property developers, including CPN, have worked to focus on better quality products and services at lower prices as well as to improve their activities in terms of concept, design and operations.
CPN's financial status during 1998-2000 can be characterized as average with high profitability and slightly low cash flow protection, TRIS said. The company recorded high operating income as a percentage of revenues more than 50%, during the past three years. Pretax return on permanent capital climbed from 8.2% in 1998 to 11.0% in 2000 mainly as a result of improved occupancy rates and decreases in rental discounts in some projects after the economic crisis. EBITDA interest coverage ratio improved from 2.1 times in 1998 to 3.7 times in 1999 and 4.0 times in 2000. Funds from operation-to-total debt also increased from 18.1% in 1998 to 19.2% in 1999 and 19.3% in 2000. CPN plans to issue five-year debentures worth not more than Bt1,500 million in the first half of 2001 to finance capital expenditures and working capital in the existing projects. As of 31 January 2001, it recorded acceptable outstanding debt burden: long-term loans amounted to Bt3,826 million and short-term loans outstanding were Bt314 million, TRIS said.
Central Pattana PLC (CPN) Company Rating Senior debt BBB+ Issue Rating CPN066A: Up to Bt1,500 million senior debentures due 2006 BBB+
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