Bangkok--21 Oct--Fitch Ratings
Fitch Ratings (Thailand) Limited has placed SVI Public Company Limited’s (SVI) National Long-Term ‘BBB+(tha)’ rating and National Short-Term ‘F2(tha)’ rating on Rating Watch Negative (RWN) after flooding in central Thailand and Bangkadi Industrial Estate.
SVI suffered flood damage to its electronic product manufacturing plants in Bangkadi Industrial Estate in Pathumthani Province. The company has five manufacturing plants; three of which are located in Bangkadi Industrial Estate. While it is too early to quantify the losses, SVI is likely to face revenue disruption before it restores full production capacity.
While the short-term impact should be mitigated by the insurance coverage on property damage and business interruption, there remains the risk of the longer term effect that manufacturing disruption could lead to a loss of customer confidence in the company. This could negatively affect SVI’s business in the medium term.
The RWN will be resolved once Fitch has more clarity on the flood impact on SVI’s business and financial profiles, as well as on management strategy to restore operations. SVI’s ratings may be downgraded if deterioration in customer confidence leads to a loss of key customers, significantly reduced earnings prospects, and funds from operations-adjusted net leverage exceeding 1.0x on a sustained basis.