Fitch assigns ‘BBB+’ rating to Sime Darby Plantations
KUALA LUMPUR: Fitch Ratings has assigned a long-term foreign currency issuer default rating of “BBB+” on Sime Darby Plantations Bhd (Sime Darby Plantations) with a stable outlook, ahead of the company’s and Sime Darby Property Bhd’s listing on Thursday.
In a statement yesterday, Sime Darby Bhd said Fitch had also removed the Rating Watch Negative on its US$1.5 billion (RM6.16 billion) sukuk programme and the outstanding issuance under the programme, which were transferred to Sime Darby Plantations from it in May, and affirmed the sukuk at “BBB+”.
Sime Darby was assigned a rating of “BB+” from its previous “BBB+” for its long-term foreign and local currency issuer default ratings.
Sime Darby said Fitch had noted that following the demerger of its property and plantation businesses, the group would be a smaller company focusing on the automotive and industrial equipment sectors.
However, it said following a group-wide debt restructuring exercise, as of September, Sime Darby had a total debt of RM2.8 billion and a lower debt-to-equity ratio of 18 per cent. Of its RM2.8 billion, RM547 million is longterm while the rest is short-term.
The company recorded strong operating cash flow of RM1.5 billion in the financial year 2017.
Fitch also downgraded Sime Darby’s senior unsecured rating to “BB+” from “BBB+”.
Simultaneously, the ratings have all been removed from Rating Watch Negative, which had been in place since March 2.
“We are in an excellent position to capitalise on our core strengths, mainly our strong balance sheet, healthy relationships with our principals, geographical reach and leadership position in both sectors,” said Sime Darby group chief executive officer Jeffri Salim Davidson.