ThaiBev risk profile 'subdued'
Thai Beverage's financial-risk profile will remain subdued even if it needs Bt15.4 billion to acquire 100 per cent of Serm Suk, according to a ratings agency.
Standard & Poor's Ratings Services estimates that ThaiBev's debt-to-EBITDA (earnings before interest, taxes, depreciation and amortisation) ratio will weaken to about 1.4, from 0.7, and its debt-to-debt-plus-equity ratio will increase to 32 per cent, from about 20 per cent for the half-year ended June 30.
"In our opinion, the consistent free cash-flow generation from ThaiBev's spirits division should continue supporting its modest financial-risk profile," S&P said in a statement issued yesterday. "The proposed transaction also should not immediately affect ThaiBev's liquidity, as the company has ample credit lines.
"ThaiBev expects to finance the acquisition with a bridge loan that will be subsequently converted into a three-to-five-year loan." ThaiBev is assigned a corporate credit rating of "BBB", which factors in some buffer for expansion.
ThaiBev's product diversification is expected to improve marginally if the deal is successful. On the basis of full consolidation, S&P estimates the non-alcoholic-beverages division will contribute about 10 per cent of EBITDA, up from about 2 per cent before the proposed SSC acquisition.
ThaiBev expects to submit its tender offer for SSC shares by tomorrow.
