Apr 21, 2011

Uniflora rating unaffected by bond delay

Standard & Poor's Ratings Services said today the postponement of PT Uniflora Prima's proposed bond issue will not affect our rating (B-/Stable--) on the company.
In the press statement, Uniflora's concentrated business profile would not have been materially improved by the acquisition of PT Davomas Abadi Tbk (CCC+/Negative/--) as the activities, client base, and business models of the two companies are similar. 
"We also believe the impact of the delayed acquisition on Uniflora's profitability would be limited as we expected synergies to be restricted to logistical and administrative elements." 
Uniflora will have no financial debt, given the postponed bond issue. "Nevertheless, we believe the company's strategy remains aggressive despite the delay in the proposed Davomas acquisition, and the company may seek the opportunity to increase its debt for organic or external growth."

Disclosure: No position at the stock mentioned above.  

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