TRIS Rating Co., Ltd. has upgraded the ratings of Saha Pathana Inter-Holding PLC (SPI) and its Bt1,000 million senior debentures (SPI071A) to "A+" from "A" with "stable" outlook. At the same time, TRIS Rating has downgraded the rating of Bt850 million senior secured debentures (PRK081A) of Premier Resort Krabi Co., Ltd. (PRK) to "BB+" from "BBB" and maintains the "negative" rating outlook.
TRIS Rating reported that the ratings reflect SPI's continuously improving financial status, its diversified investments, the long experience and demonstrated capability of its management team, and the group's leading positions in its core businesses: instant noodles, garments, and cosmetics. The ratings also take into consideration SPI's conservative investment policy. However, these strengths are partially offset by the intense competition in the consumer products and food industries and Saha Group's complex shareholding structure. While the "stable" outlook reflects the stability of both the business and financial profiles of SPI. Dividend income from its diverse holdings, which are mostly in the consumer products sector, will continue to generate stable cash flow for SPI in the medium- to long-term.
For the downgrade of PRK, TRIS Rating said that the rating actions reflect PRK's weak liquidity cushion and the expectations that PRK's cash flow from operation during 2004 and 2005 will be far weaker than TRIS Rating's previous expectation due partly to the recent tsunami. As PRK generates almost all of its cash flow from a single asset, Rayavadee hotel, the sharp decline in occupancy rate significantly impairs the company's financial profile, especially its liquidity. The rating also takes into consideration the high competition in the hotel business and the cyclical nature of the hotel industry, which is highly sensitive to external factors. However, the rating is supported by PRK's high quality resort property. Moreover, the issue rating is enhanced by secured collateral and provisions that protect the company's cash flow for the debentureholders. While the "negative" outlook reflects PRK's liquidity constraint during the next 12 months. If the company cannot find additional liquidity back up by March 2005 that can cover its debt service obligations for the next 12 months, the rating will be downgraded. However, if PRK's liquidity constraint is resolved and operating performance has been restored to normal, the rating will be affirmed, TRIS Rating said. - End
Saha Pathana Inter-Holding PLC (SPI) Company Rating: Upgraded to A+ from A Issue Rating: SPI071A: Bt1,000 million senior debentures due 2007 Upgraded to A+ from A Rating Outlook: Stable
Premier Resort Krabi Co., Ltd. (PRK) Issue Rating: PRK081A: Bt850 million senior secured debentures due 2008 Downgraded to BB+ from BBB Rating Outlook: Negative