Moody's changes AA's rating outlook to negative

The outlook change is in response to Advance Agro's announcement that its board of directors has received a purchase offer for the company's shares from Yothin Damnerncharnwanit, a current director and shareholder, for Bt39 per share, or a total consideration of approximately Bt21 billion, the rating company said in a statement issued from its Hong Kong office.

 The buyout is subject to shareholder approval and Advance Agro's shares will be de-listed upon completion of the transaction.

 The negative outlook mainly reflects: 1) the uncertainties pertaining to Advance Agro's financial and business strategies; and 2) Moody's concerns about the company's corporate governance and level of disclosure post-privatization.

 Moody's also noted that Advance Agro's year-to-date operating performance has deteriorated and is below expectation.

 The rating could be downgraded if there is evidence of weakening in the company's corporate governance and disclosure practices, or further deterioration in the company's financial profile with EBITDA/Interest falling below 1.2-1.5x.

As of 2pm, Advance Agro's share price is Bt38, up Bt0.50 from yesterday.

- The Nation