Fri, 29 Mar 2024 Today's Paper

Sunshine’s Rs.775mn private placement inadequate for rating upgrade: Fitch

23 May 2018 10:21 am - 0     - {{hitsCtrl.values.hits}}

A A A

Sunshine Holdings PLC’s (A-(lka)/Stable) plan to bring in new equity worth Rs.775 million from a private placement of shares should help the company deleverage and strengthen its balance sheet, Fitch Ratings says. However, the rating agency expects Sunshine’s ratings to remain unchanged as the projected fall in net leverage will be insufficient to trigger an upgrade.

Sunshine used mostly debt in 2017 to fund a Rs.2.9 billion purchase of an additional stake in its plantation business, which drove up leverage substantially.   “We estimate that a successful private placement would see the company’s net leverage improve to 2.0x in the financial year ending March 2019, from our 2.4x forecast.  Sunshine’s net leverage is defined as lease-adjusted debt net of cash/operating EBITDAR, including proportionate consolidation of Estate Management Services (Private) Limited, the holding company for the agriculture and consumer goods segments. 


The estimate is still higher than the 1.5x threshold below which we may upgrade the company’s rating,” Fitch said.   


On 17 May 2018, Sunshine, through a stock exchange filing, announced an issue of 11.9 million ordinary shares by way of a private placement to SBI Ven Holdings Pte Limited (SVH). 


According to the public announcement, the proceeds will be used to reduce the company’s net debt by partly repaying debt in the holding company, while maintaining any balance in term deposits.


Following this transaction, SVH will increase its stake in Sunshine to 18 percent, from 11 percent. 


Sunshine expects the share issue to be completed by end-June 2018 subject to regulatory and shareholder approval.  

 


Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

  Comments - 0

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment





Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

VAT increase: SOUNDs death knell for publishers, readers

Though the Government imposed VAT (Value Added Tax) on vegetables and other e

How female change-makers are driving Sri Lanka’s energy saving platform

Saving energy has become more of a responsibility than a habit in today’s c

A dull Ramadan awaits Muslims amidst the Soaring Cost of Living

In the coming days, Muslims across the world will welcome the Holy Month of R

New wildlife underpass to curtail HEC

As of February 2024, Sri Lanka lost another 38 elephants as a result of the H