According
to Fitch, the outlook revision from stable came as Hoang Anh Gia Lai
JSC faced higher credit risks due to a sharp drop in property sales in
Ho Chi Minh City.
"As
a result, HAGL was saddled with completed, but unsold, inventory of
VND3.5 trillion at end-2011," the agency said, adding that the company's
net debt increased to VND8.7 trillion at end-2011 from VND2.3 trillion a
year earlier.
HAGL
has no plans to launch new property projects in the near term while
some of its non-property related businesses have commenced operations
and will likely improve cash flow from operations in 2012, Fitch said.
The
company begun selling iron ore in 2011 and three of its planned 17
hydro power projects have begun generating power and more are likely to
come onstream in 2012, the agency added.
Chairman Doan Nguyen Duc told the VnExpress
newswire that he respected assessments made by international ratings
agencies, but added Fitch did not take all operations of his company
into consideration this time.
The
assessment was mainly made based on property projects, which are no
longer the key business at HAGL, he said, noting that its rubber,
electricity and mining projects have started to make money.
The downgrade could affect the company's abilities to raise capital, Duc
said. "But I believe investors will be confident when we achieve our
business targets."
Fitch
said the rating outlook may be revised to stable only when the
company's property inventory has been "substantially liquidated" and the
iron ore and hydro power businesses begin "contributing meaningfully to
the company." |
