Thai Rating and Information Services Co., Ltd. (TRIS) announced that it has assigned a "A" company rating to Saha Pathana Inter-Holding PLC (SPI) and a "A" rating to SPI's Bt1,000 million senior debentures. The ratings are based on the key roles of the company to the Saha Group, the company's diversified investments, the long experience and capability of its management team, and the leading positions of the group's core businesses: garments, cosmetics and instant noodles. The ratings also take into consideration SPI's conservative investment policy, sufficient financial flexibility and low leverage. However, the competitive environment of the consumer products and foods industries may put these strengths under severe tests. In addition, the ratings factor in SPI's cash flow generating capability, the complex shareholding structure of its investments and risk exposure from guarantees to affiliates.
TRIS reported that established as the major holding company of Saha Group, SPI is responsible for initiating and investing in new businesses, providing debt and guarantee support to affiliates, facilitating industrial parks and infrastructure, and providing other services. The company has investments in almost 200 diversified companies, mainly in consumer products and foods. The diversity of its investments protects the company from severe operating loss risks due to business concentration and economic cycle. The company confines its investments to a small percentage of each company's share capital to further minimize risk of loss. This investing philosophy reflects the management's conservative financial policy.
TRIS said the management teams of the group's core businesses have been successful, and with policy guidance from SPI's competent management team, SPI's group of companies has been able to maintain leading positions in various markets. The ability of Saha Group to sustain competitive advantage through branding is apparent in its garment, cosmetic, instant noodle and detergent businesses. Possessing many acceptable brand names and unique know-how is an important element in its competitiveness. The integrated business structure of the group, both vertical and horizontal, is another key to success. The major segments in which the group has very competitive positions, with significant market shares, are intimate apparel, cosmetics and instant noodles. However, TRIS said the very competitive nature of the businesses challenges the group to innovate continuously and improve its costs to sustain its leading positions.
TRIS reported SPI's financial status that its leverage ratio has been improving. Total debt as a percent of capitalization, including guarantees, has fallen from 58.39% in 1997 to 38.03% in 2000. However, cash flow generating adequacy, though showing signs of improvement, is relatively low. The funds from operation (FFO) interest coverage ratio has been less than two times since 1997, but it shot up to 4.17x during the first six months of 2001. FFO as a percent of total debt has been below 5% since 1997. However, the ratio improved significantly during the first half of 2001, rising to 12.01%, even on a non-annualized basis. Loan guarantees to affiliates have decreased considerably since the 1997 crisis; they stood at Bt797 million as of June 2001, almost a four-fold drop from the peak of 2,673 million in 1997.
Regarding the connected transactions within Saha Group, SPI conforms with regulations of the Stock Exchange of Thailand (SET), and has never had any controversial or questionable practice in this regard. However, the complexity of its shareholding structure might put investors in a somewhat difficult position to comprehend the group and evaluate it as a whole, TRIS said.
Saha Pathana Inter-Holding PLC (SPI) Company Rating A Issue Rating Bt1,000 million senior debentures due 2006 A
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TRIS reported that established as the major holding company of Saha Group, SPI is responsible for initiating and investing in new businesses, providing debt and guarantee support to affiliates, facilitating industrial parks and infrastructure, and providing other services. The company has investments in almost 200 diversified companies, mainly in consumer products and foods. The diversity of its investments protects the company from severe operating loss risks due to business concentration and economic cycle. The company confines its investments to a small percentage of each company's share capital to further minimize risk of loss. This investing philosophy reflects the management's conservative financial policy.
TRIS said the management teams of the group's core businesses have been successful, and with policy guidance from SPI's competent management team, SPI's group of companies has been able to maintain leading positions in various markets. The ability of Saha Group to sustain competitive advantage through branding is apparent in its garment, cosmetic, instant noodle and detergent businesses. Possessing many acceptable brand names and unique know-how is an important element in its competitiveness. The integrated business structure of the group, both vertical and horizontal, is another key to success. The major segments in which the group has very competitive positions, with significant market shares, are intimate apparel, cosmetics and instant noodles. However, TRIS said the very competitive nature of the businesses challenges the group to innovate continuously and improve its costs to sustain its leading positions.
TRIS reported SPI's financial status that its leverage ratio has been improving. Total debt as a percent of capitalization, including guarantees, has fallen from 58.39% in 1997 to 38.03% in 2000. However, cash flow generating adequacy, though showing signs of improvement, is relatively low. The funds from operation (FFO) interest coverage ratio has been less than two times since 1997, but it shot up to 4.17x during the first six months of 2001. FFO as a percent of total debt has been below 5% since 1997. However, the ratio improved significantly during the first half of 2001, rising to 12.01%, even on a non-annualized basis. Loan guarantees to affiliates have decreased considerably since the 1997 crisis; they stood at Bt797 million as of June 2001, almost a four-fold drop from the peak of 2,673 million in 1997.
Regarding the connected transactions within Saha Group, SPI conforms with regulations of the Stock Exchange of Thailand (SET), and has never had any controversial or questionable practice in this regard. However, the complexity of its shareholding structure might put investors in a somewhat difficult position to comprehend the group and evaluate it as a whole, TRIS said.
Saha Pathana Inter-Holding PLC (SPI) Company Rating A Issue Rating Bt1,000 million senior debentures due 2006 A
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