Standard & Poor had remove Thai Beverage from its credit watch. Its rating had also been changed from BBB to BBB- with negative outlook.
According to S&P website:
‘BBB-‘—Considered lowest investment grade by market participants.
The first reason was due to the high cost of the F&N acquisition which amount to about US$11.2Bn. The company debts are expected to remain high and cash flow to remain adequate.
The second reason was that TCC Assets hold about 61% of F&N and no plans were known as to how the debt will be financed.
With that being said, F&N still remains strong in its beverage sectors owning 100 PLUS, Fruit Tree, Seasons and Ice Mountain.
Drinks made up majority of profits in coffee shops and will continue to grow because people will need to quench their thirst. This stock poses strong upside potential and will possess the financial strength to handle the debts.
Source: http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_901BDC35F61B0FFB48257B4A004547E9/$file/Corporate_Rating_by_SP.pdf?openelement
Source: http://blogs.wsj.com/deals/2013/04/12/thaibevs-fn-deal-prompts-credit-rating-downgrade/
Drinks made up majority of profits in coffee shops and will continue to grow because people will need to quench their thirst. This stock poses strong upside potential and will possess the financial strength to handle the debts.
Source: http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_901BDC35F61B0FFB48257B4A004547E9/$file/Corporate_Rating_by_SP.pdf?openelement
Source: http://blogs.wsj.com/deals/2013/04/12/thaibevs-fn-deal-prompts-credit-rating-downgrade/
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