MOODY'S Investors Service has downgraded ST Engineering's baseline credit assessment (BCA) to a3 from a2 based on an expected deterioration of the company's financials following its acquisition of Belgium-based satellite company Newtec Group. Read more at The Business Times.
At the same time, the credit rating agency has affirmed the company's triple A issuer rating, which takes into account the a3 baseline credit assessment rating and expectation of"very strong" support from the Singapore government through its wholly owned investment company, Temasek Holdings.
Moody's lead analyst for ST Engineering, Nidhi Dhruv, said that although the acquisition of Newtec was relatively small at S$383 million, it"comes close on the heels of STE's last debt funded acquisition of MRA Systems for S$868 million, and signals a shift in the company's acquisition strategy and a willingness to lever up its balance sheet".
She noted that its mainly debt-funded acquisitions are significantly larger than the company's recent history of acquisitions, and exposed the company to execution and integration risks. ST Engineering's gross leverage will increase to about 2.3-2.4 in FY2019 and stay above 2.0 in FY2020, which Moody's said are not in line with the company's earlier BCA of a2.
Moody's said that ST Engineering's Aaa rating remains supported by the company's strong technological capabilities, which drive its commercial business, while its defence contracts continue to support its underlying operations. It added that the company has a strong order book, with an order backlog of S$13.2 billion as at Dec 31, 2018, which supports around two times of revenue for 2018.
It added that the company's diversified portfolio of aerospace, electronics, land systems and marine will help mitigate demand volatility in any individual segment.
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Stocks to watch: SIA, SGX, ST Engineering, Yanlord LandTHE following companies saw new developments that may affect trading of their shares on Thursday: Read more at The Business Times.
Read more »
ST Engineering bags first seaport AGV contractST Engineering on Tuesday announced that it has received its first contract for its autonomous material handling solutions for an undisclosed sum, in a filing to the Singapore Exchange. Read more at The Business Times.
Read more »
Stocks to watch: DBS, SIA, ST Engineering, Metro, Sapphire CorpTHE following companies saw new developments that may affect trading of their shares on Wednesday: Read more at The Business Times.
Read more »
ST Engineering to fully acquire Belgium satellite telecoms group for 250m eurosST Engineering announced on Wednesday that it has entered into a conditional share purchase agreement to acquire 100 per cent ownership of Belgium-based satellite telecommunications firm Newtec Group for 250 million euros (S$381 million) in cash. Read more at The Business Times.
Read more »
Trade optimism boosts Wall St; S&P 500 notches best quarter since 2009U.S. stock index futures rose on Friday, the last trading day of the quarter, as the latest round of U.S.-China trade talks ended on a positive ...
Read more »
No reason to debar ST Marine from patrol boats tender based on CPIB investigations: Indranee RajahThe Second Minister for Finance says the charges and convictions against six former senior ST Marine executives in 2017 are separate and distinct ...
Read more »
US: Wall St opens higher on trade progress, China data[NEW YORK] US stocks opened higher on Monday, as a surprise recovery in China factory activity and further signs of progress in the US-China trade talks helped extend last quarter's upbeat mood. Read more at The Business Times.
Read more »
St John's Island, Pulau Hantu cleared of asbestos: SLASINGAPORE: All asbestos removal works on St John’s Island and Pulau Hantu have been completed, the Singapore Land Authority (SLA) announced on ...
Read more »
St John's Island and Pulau Hantu cleared of asbestos, campsites on St John's to re-open in JuneSINGAPORE - All traces of asbestos on St John's Island and Pulau Hantu have been removed, and both islands will be fully re-opened to the public, said the Singapore Land Authority (SLA) in a release on Friday (March 29).. Read more at straitstimes.com.
Read more »