Thai Beverage PLC’s  (SGX: Y92) credit rating was cut to junk by Standard & Poor, which cited concern about the debt and cash flow of the group controlled by billionaire Charoen Sirivadhanabhakdi after the purchase of Fraser & Neave Ltd. (SGX: F99).

The company was cut to BB+, one level below investment grade, from BBB-, S&P said in a statement. After the downgrade, S&P withdrew all ratings at the company’s request, it said.

Charoen, whose businesses range from milk to shopping malls through his companies, including Thai Beverage and TCC Assets, bought F&N earlier this year for S$13.8 billion (US$11 billion).

“We view the group as highly leveraged,” S&P said in the statement, referring to Thai Beverage, TCC Assets and F&N.

“We evaluate the group’s consolidated cash flow adequacy as substantially weaker and its consolidated debt as considerably higher than that of either Thai Bev or F&N on a stand-alone basis.”

Thai Beverage dropped 3.1% to 47.5 Singapore cents at the close of trade before the S&P announcement, the lowest since Sept 4.

About Nut Muengrit

Nut Muengrit has been doing business throughout Southeast Asia for many years and is on the board of directors of companies in Thailand, Vietnam, Hong Kong and Cambodia. He is knowledgeable in offshore incorporation and low-tax structures.
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