Friday 29 Mar 2024
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KUALA LUMPUR: Moody's Investors Service sees no rating impact from IOI Corporation Bhd's proposed renounceable rights issue to raise RM1.22 billion.

IOI ratings are Baa1 with negative outlook, it said in a statement issued on July 27.

The proposed renounceable rights issue -- still subject to approval from shareholders and regulators -- will take around three months to complete.

The proceeds will be used for planned capital expenditures, potential investments, debt repayments and working capital purposes for the next  two years.

"The cash injection from the potential rights issue, if completed, will lead to an improvement in IOI's liquidity profile, but it will not be
significant enough to change the current rating and its outlook," says Kathleen Lee, a Moody's VP and senior analyst.

"Moody's considers that in the context of challenging conditions in the palm oil and property markets in Malaysia and Singapore, improvements
instead in profitability and a reduction of net exposures to derivatives would have relatively more impact on its current ratings outlook," says
Lee, also Moody's lead analyst for the company.

The last rating action on IOI was taken on March 2, 2009, when the outlook for the company's issuer and debt ratings were changed to negative from stable.

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