PNB's conditional offer for remaining S P Setia shares no rating impact, says RAM

KUALA LUMPUR: Rating agency RAM Rating Services Bhd opines that there is no immediate rating impact from Permodalan Nasional Bhd's (PNB) recent conditional offer for the remaining shares of S P Setia Bhd.

S P Setia's RM500 million Redeemable Serial Bonds are currently rated AA3/P1 by RAM Ratings; the long-term rating has a stable outlook.

Head of RAM Ratings' Real Estate and Construction Ratings Shahina Azura Halip said RAM views any rating at this juncture to be premature.

"Should PNB continue to leave the strategic planning and daily operations in the capable hands of S P Setia's present management, the group's strategic lineage may pave the way for additional business opportunities through PNB's vast land bank or put it in the running for more attractive government projects. This would be a positive move for the group," she said.

She, however, cautioned that the group's longer term business profile may face negative implications if its chief executive officer Tan Sri Liew Kee Sin decides to sell his entire stake or if PNB's involvement and control over the group extends beyond board representation, thus inhibiting the agility of the management team.

On Sept 28, PNB, Malaysia's largest fund manager with a capital portfolio of RM131.5 billion, offered to pay cash for S P Setia's shares at RM3.90 a share and warrants at 91 sen per unit.

This followed PNB's and parties acting in concert with it earlier acquisition of 3.07 million shares from the open market, thereby raising their collective stakes to 33.2 per cent and triggering the general offer.

Last week, PNB and S P Setia made a joint announcement, with the former saying that it intended to maintain S P Setia's listing and would confine its involvement in the group to only board representation.

PNB's offer document and S P Setia's independent advice circular to its shareholders are expected to be released next week.

RAM Ratings has initiated the annual rating review on the group and will make the appropriate rating announcement in due course. — Bernama