PRESS RELEASE: GSS Array Technology Plc Wednesday, 16 October 1996 --------------------------------------------------------------------------------------
TRIS announces a “negative” designations of CreditAlert for GSS
Thai Rating and Information Services (TRIS) announced Wednesday, 16 October 1996, a CreditAlert for the rating of GSS Array Technology PLC’s (GSS) 1,000 million baht debentures. TRIS placed the rating on CreditAlert with “negative” implication, indicating the rating may be lowered. The CreditAlert is based on TRIS’s concern over GSS’s deteriorating performance, which results in debt service coverage measures below those expected for the current rating.
GSS’s earnings for the nine months ended 31 August 1996 declined 59% to 66.8 million baht with estimated cash flows to total debt and interest coverage about 19.2% and 1.8 times, compared with 27.5% and 3.8 times, respectively in 1995. The results reflect the slowdown in the global electronics industry, especially in the US market. The impact of the stagment growth reflects directly in decreased customer demand, particularly the US customers which accounted for 70% of GSS’s revenues in 1995. TRIS expects the current situation to persist through 1997. GSS’s cost of production also increased significantly mostly from the higher prices of imported raw materials, which not only reduces net profits but also makes it difficult to compete with contract manufacturers outside Thailand with lower raw material and labor costs.
TRIS will meet with the company’s management shortly to discuss and review its business prospects and financial situation in detail to determine the impact on the rating.
Note: CreditAlert, as part of TRIS’s monitoring process, is a public warning TRIS issues when information is insufficient to fully assess and reconsider a debt instrument’s current rating or when significant events may affect the company’s rating already assigned by TRIS because of changing business conditions. CreditAlert designations may be “positive”, “negative” or “developing”, depending on the likely impact of a particular situation. The existing rating continues unchanged for the present. Monitoring is done until the debt instrument matures or the company’s rating contract expires.
Company: GSS Array Technology PLC (GSS) CreditAlert designation: Negative Debt issue: Senior debt: 1,000 million baht debentures Current rating: BBB Current announcement date: 1 September 1995
TRIS announces a “negative” designations of CreditAlert for GSS
Thai Rating and Information Services (TRIS) announced Wednesday, 16 October 1996, a CreditAlert for the rating of GSS Array Technology PLC’s (GSS) 1,000 million baht debentures. TRIS placed the rating on CreditAlert with “negative” implication, indicating the rating may be lowered. The CreditAlert is based on TRIS’s concern over GSS’s deteriorating performance, which results in debt service coverage measures below those expected for the current rating.
GSS’s earnings for the nine months ended 31 August 1996 declined 59% to 66.8 million baht with estimated cash flows to total debt and interest coverage about 19.2% and 1.8 times, compared with 27.5% and 3.8 times, respectively in 1995. The results reflect the slowdown in the global electronics industry, especially in the US market. The impact of the stagment growth reflects directly in decreased customer demand, particularly the US customers which accounted for 70% of GSS’s revenues in 1995. TRIS expects the current situation to persist through 1997. GSS’s cost of production also increased significantly mostly from the higher prices of imported raw materials, which not only reduces net profits but also makes it difficult to compete with contract manufacturers outside Thailand with lower raw material and labor costs.
TRIS will meet with the company’s management shortly to discuss and review its business prospects and financial situation in detail to determine the impact on the rating.
Note: CreditAlert, as part of TRIS’s monitoring process, is a public warning TRIS issues when information is insufficient to fully assess and reconsider a debt instrument’s current rating or when significant events may affect the company’s rating already assigned by TRIS because of changing business conditions. CreditAlert designations may be “positive”, “negative” or “developing”, depending on the likely impact of a particular situation. The existing rating continues unchanged for the present. Monitoring is done until the debt instrument matures or the company’s rating contract expires.
Company: GSS Array Technology PLC (GSS) CreditAlert designation: Negative Debt issue: Senior debt: 1,000 million baht debentures Current rating: BBB Current announcement date: 1 September 1995