TRIS Rating Announces “Developing” CreditAlert for “BTSC’s” Ratings

TRIS Rating Co., Ltd. has placed the company and issue ratings of Bangkok Mass System PLC (BTSC) on CreditAlert with “developing” implication. The action follows the announcement of Thanayong PLC (TYONG) on 23 March 2010 about its intention to acquire at least 94.6% of the common stock of BTSC. However, the acquisition plan needs the approval of TYONG’s shareholders at the extraordinary shareholders’ meeting which will be held on 29 April 2010. TYONG is expected to pay Bt40,035 million to purchase the shares, consisting of Bt20,656 million in cash and Bt19,379 million in common stock of TYONG. TYONG is finalizing all financing plans, including a fully underwritten rights offering to its existing shareholders and new borrowings.

TRIS Rating reported that TYONG is a medium size property developer listed on the Stock Exchange of Thailand. The company operates hotels, rental services for residential apartments and office building, and project management services. The property portfolio of TYONG includes U Chiang Mai Hotel, The Grand residential apartment and Thana City Golf and Country Club. As of December 2009, TYONG had total assets of Bt7,598 million and total shareholders’ equity of Bt4,585 million. For the first nine months of fiscal year 2010, sales stood at Bt801 million with a net loss of Bt42 million.

TRIS Rating said, if the acquisition is successful, TYONG will become the controlling shareholder of BTSC and assume management control. As a result, the ratings of BTSC will hinge on TYONG’s credit quality. TYONG’s current operation is quite small with a weak financial profile. However, after the acquisition, TYONG’s consolidated financial profile will be dominated by BTSC’s financial status and the finalized capital structure. If the acquisition is funded by substantial amount of debt, the group’s financial profile may be weaker.

TRIS Rating will resolve its CreditAlert after the details of financing plan is finalized. TRIS Rating will also meet with the management team of BTSC to assess the group business and financial profiles following the transaction. Currently, BTSC’s company and senior debentures ratings of BTSC are assigned at “A” by TRIS Rating. -- End

Company Rating: A Issue Ratings: BTS128A: Bt2,500 million senior debentures due 2012 A BTS138A: Bt2,500 million senior debentures due 2013 A BTS148A: Bt4,000 million senior debentures due 2014 A BTS158A: Bt1,500 million senior debentures due 2015 A BTS168A: Bt1,500 million senior debentures due 2016 A CreditAlert Designation: DEVELOPING Copyright 2010, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.