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February 27, 2008 |
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TRUE CORP: Moody's Affirms B1 Ratings; Outlook Remains Negative Moody's Investors Service has affirmed the B1 corporate family ratings and senior unsecured bond ratings of True Corporation Public Company Limited. The outlook on the ratings remains negative. "The affirmation is in response to True Corp.'s recent announcement that it is considering raising up to THB20 billion to, in part, fund up to THB4 billion buy-back of shares in BITCO from its 30% shareholder, Charoen Pokphand Group," say Laura Acres, a Moody's Vice President. "The proposed financing is a contingency plan in the event that shareholders, at the April 2008 AGM, do not give their approval to extend the term on the buy-back option from June 2008 to June 2009," says Acres, also Moody's Lead Analyst for the company, adding, "Given the tight headroom under True Corp's financial covenants, the planned debt raising will also need lenders' approval." It remains uncertain at this stage as to the shareholders' decision and whether True Corp will get the necessary lenders' approval for raising additional debt. "However, Moody's considers that any increase in debt outstanding in the near term is likely to place further negative pressure on the ratings as it will impact True Corp's financial profile with little headroom to meet the financial covenants of its loan facilities," says Acres. Moody's will continue to monitor the developments and evaluate the resultant rating impact. Headquartered in Bangkok, True Corp is an integrated provider of fixed line, broadband, Internet, mobile services and cable TV in Thailand. True Corp. is listed on the Thailand Stock Exchange and the CP Group is the major shareholder with approximately 30% shareholding. Its wireless business is predominantly conducted through its 75.3% owned (post equity injection) True Move, Thailand's third largest mobile telecommunications operator; and its pay TV business is conducted through its 91.8% owned True Visions Public Company Limited (True Visions), which is currently the only nationwide provider of pay television services in the country. |
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