MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it has
affirmed its 'BB' long-term foreign currency corporate credit rating on
Philippines-based San Miguel Corp with a negative outlook, after the company
announced the sale of its units.
San Miguel sold its Australian dairy and juice unit, National Foods Ltd, to
Japanese brewer Kirin Holdings Co Ltd for 2.8 bln aud and also sold its premium
Tasmanian brewer J Boag & Son to alcoholic beverage company Lion Nathan Ltd for
325 mln aud.
"These transactions are expected to generate about 2.3 bln aud in cash to
San Miguel's treasury by the year end, significantly improving its liquidity,"
S&P's credit analyst Manuel Guerena said.
The company's coming IPO plan to float a portion of its equity in its beer
business is also expected to significantly boost liquidity in the short term, he
added.
However the company is expected to eventually invest these proceeds, with
alternatives ranging from paying off debts, increasing its dividend payout,
and/or investing in emerging opportunities.
The negative outlook is expected to remain until after a detailed review of
San Miguel's business strategy, including its venture into businesses where it
has little experience and its exposure to Philippines' power sector, which has
higher risks than San Miguel's traditional business portfolio, S&P said.
TFN.newsdesk@thomson.com
pvi/jro
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