TRIS Rating Co., Ltd. has placed a CreditAlert with “negative” implication for the company rating of TPI Polene PLC (TPIPL) and has maintained the company rating at “BBB”. The CreditAlert comes after the Criminal Court appointed an executing officer pursuant to the Criminal Court judgment on 3 December 2007. The “negative” implication reflects a concern that the enforcement of the judgment by the Court will significantly impact the company’s liquidity and ongoing operations, even though the core business remains strong in cash flow generation.
TRIS Rating reported that the litigation started on 22 March 2006, and on 3 December 2007, the Criminal Court ruled that TPIPL was guilty of violating the Securities and Exchange Act B.E. 2535 by disseminating information other than the information contained in the registration statement filed with the office of the Securities and Exchange Commission (SEC). The company was fined Bt6,900 million. Subsequently, on 15 February 2008, the company filed an appeal against the judgment of the Criminal Court with the Appeal Court. On 18 March 2008, TPIPL filed a motion with the Criminal Court requesting the Court to cease the legal execution of the judgment but the Criminal Court issued an order to dismiss the motion. Subsequently, on 10 April 2008, the company filed an appeal against the dismissal order of the Criminal Court with the Appeal Court. As the cases are under the Appeal Court’s considerations, the company is of the opinion that the payment of fine is not required pursuant to Section 245 of the Criminal Procedure Code. On 5 August 2008, the Criminal Court issued an order appointing an executing officer. On 6 August 2008, the company filed a motion objecting to the appointment of the executing officer with the Criminal Court, which issued an order accepting such motion.
On a conservative basis, TPIPL has recorded a provision for the fine of Bt6,900 million in the financial statements as at 30 June 2008 whilst continuing to pursue its appeals and objections through the Courts. Though the provision is a non cash item, it caused the equities to decrease from Bt57,837 million (before provision) to Bt50,937 million (after provision) as of June 2008, which hampered the company’s financial leverage ratio.
TRIS Rating will resolve the CreditAlert listing once the assessment of the impact from this event on TPIPL’s financial profile has been completed. -- End
TPI Polene PLC (TPIPL)
CreditAlert Designation: Negative
Company Rating: BBB
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Copyright 2008, 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. 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.
TRIS Rating reported that the litigation started on 22 March 2006, and on 3 December 2007, the Criminal Court ruled that TPIPL was guilty of violating the Securities and Exchange Act B.E. 2535 by disseminating information other than the information contained in the registration statement filed with the office of the Securities and Exchange Commission (SEC). The company was fined Bt6,900 million. Subsequently, on 15 February 2008, the company filed an appeal against the judgment of the Criminal Court with the Appeal Court. On 18 March 2008, TPIPL filed a motion with the Criminal Court requesting the Court to cease the legal execution of the judgment but the Criminal Court issued an order to dismiss the motion. Subsequently, on 10 April 2008, the company filed an appeal against the dismissal order of the Criminal Court with the Appeal Court. As the cases are under the Appeal Court’s considerations, the company is of the opinion that the payment of fine is not required pursuant to Section 245 of the Criminal Procedure Code. On 5 August 2008, the Criminal Court issued an order appointing an executing officer. On 6 August 2008, the company filed a motion objecting to the appointment of the executing officer with the Criminal Court, which issued an order accepting such motion.
On a conservative basis, TPIPL has recorded a provision for the fine of Bt6,900 million in the financial statements as at 30 June 2008 whilst continuing to pursue its appeals and objections through the Courts. Though the provision is a non cash item, it caused the equities to decrease from Bt57,837 million (before provision) to Bt50,937 million (after provision) as of June 2008, which hampered the company’s financial leverage ratio.
TRIS Rating will resolve the CreditAlert listing once the assessment of the impact from this event on TPIPL’s financial profile has been completed. -- End
TPI Polene PLC (TPIPL)
CreditAlert Designation: Negative
Company Rating: BBB
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Copyright 2008, 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. 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.