Tris Rating has given Central Pattana Plc (CPN) an AA and put the company's rating on credit alert with a developing implication.
The credit alert follows CPN's announcement on Sept 12 that CPN Pattaya Co, a wholly owned subsidiary of CPN, had acquired 50.43% of the outstanding shares of Grand Canal Land Plc (GLAND) for 10.16 billion baht.
CPN Pattaya has submitted a tender offer for the remaining shares (49.57%) of GLAND, worth up to 9.98 million baht based on the purchase price of 3.1 baht per share. The tender offer period will end on Oct 31.
If CPN acquires 100% of GLAND, the total transaction is estimated at 20.15 billion baht. CPN plans to fund the acquisition through debt.
Tris said it believes that the acquisition will support CPN's business expansion, leveraging GLAND's prime property portfolio.
However, the funding structure and the impact from the transactions on CPN's financial profile still need to be fully assessed.
Tris will resolve the credit alert once the tender offer has been finalised and the impact from the GLAND acquisition on CPN's creditworthiness has been thoroughly analysed.