F&P Finance credit rating may be raised by S&P on Haier offer
BUSINESSDESK: Fisher & Paykel Finance's credit rating could be raised one notch to BB+ by Standard & Poor's because a takeover of parent F&P Appliances by China's Haier is likely to bolster its credit profile.
Haier has offered $1.20 a share for the 80% of FPA it doesn't already own and has agreement from Allan Gray Australia to sell its 17.46% into the offer, giving Haier an interest in 37.46%. It wants a minimum 50% of the company, ensuring control, for its offer to succeed.
"We believe the current takeover is likely to result in an improvement in the credit profile" of FPA, S&P says. Raising the finance unit's rating to BB+ from BB would lift it to a level consistent with the stand-alone credit profile.
The finance business, though, is likely to remain a non-strategic subsidiary of Haier, which doesn't have a credit rating, meaning the business isn't likely to result in any additional support from the parent, S&P says.
There was a risk that Haier could even allow a weaker capitalisation of the finance business, though this was remote, given its potential impact and the possibility that the business sold in future.