Bangkok--16 May--Moody's Moody's Investors Service has commented on the announcement by Thai Beverage Public Company Ltd (ThaiBev, Baa2/Stable) on its potential acquisition of 43.9% in Oishi Group Public Company Ltd(Oishi) from its major shareholder, and the simultaneous potential disposal of its wholly-owned subsidiary, Thai Alcohol Public Company Ltd (Thai Alcohol) to its major shareholder. Moody's says there is no rating impact on ThaiBev as a result of these potential transactions. Listed in Thailand, Oishi is a restaurant operator and food product manufacturer and distributor, while Thai Alcohol is engaged in the production of industrial alcohol. The transactions are subject to minority shareholders' approval, and would proceed only when simultaneous approvals on both deals are obtained. The potential acquisition and disposal are in line with ThaiBev's strategy of increasing investments in non-alcoholic beverage businesses. Moody's expects no material financial impact on ThaiBev as a result of the transactions in view of the company's strong cash flow generation and low leverage. In 2007, ThaiBev's adjusted retained cash flow (after dividends) was THB10.5 billion, and its adjusted debt to EBITDA was low at 0.9x. Cash balances at end-2007 were THB2.2 billion. The company thus enjoys sufficient latitude to accommodate the expected net consideration to be paid, ranging between THB1.5 billion and THB5.4 billion. The latter amount takes into account the need for ThaiBev to make a tender offer for the remaining 56.1% shares in Oishi under Thai Law, should definitive agreements be entered into upon acquisition of the proposed 43.9% stake. Any impact on revenue and profits will also be modest. In 2007, industrial alcohol contributed less than 1% to ThaiBev's gross revenue of THB100.5 billion, and the division was EBIT-negative. Disposal of this business would generate a small one-off gain of THB216 million. Oishi reported revenue of THB4.6 billion and EBIT of THB583 million in 2007. ThaiBev is a leading producer of beer and spirits in Thailand with strong market shares of about 50% of the beer and over 70% share in spirits markets. The company generated net revenues in FY2007 of THB50.7 billion (about US$1.7 billion) after excise duties. Hong Kong Renee Lam Vice President - Senior Analyst Corporate Finance Group Moody's Asia Pacific Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (852) 3551-3077 Singapore Tony Tsai Senior Vice President Corporate Finance Group Moody's Singapore Pte Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (65) 6398-8308