MARC has been informed that the noteholders of TH Group Berhad’s (THG) RM200 million Commercial Papers/Medium-Term Notes issuance programme (CP/MTN), had on November 25, 2008, consented to THG’s proposed early redemption of its outstanding RM170 million CP/MTN before year-end.

On September 29, 2008, Tung Hup Holdings Sdn Bhd (THH) and parties acting in concert, who collectively hold a 53.26% equity interest in THG, proposed to take the company private via a selective capital redemption (SCR) exercise at the price of RM0.75 for each THG share held by other existing shareholders. The proposed SCR involves a total consideration of RM139.3 million which will be funded by additional borrowings. The exercise is targeted for completion by May 2009, subject to approval by THG’s minority shareholders amongst others.

Meanwhile, the early redemption of the CP/MTN, expected before year-end will be funded by THG’s proposed RM330 million Islamic notes programme (ICP/IMTN) which was recently approved by the Securities Commission. The redemption of the CP/MTN is not conditional on approval of the proposed SCR by THG’s minority shareholders.

Based on the unaudited interim financial report for 3Q2008, THG’s revenue increased to RM303.9 million (3Q2007: 241.4 million), an increase of 25.9% compared to the previous year, on account of higher average crude palm oil prices received. As at September 30, 2008, debt-equity ratio (DE ratio) stood at 0.80 times, below the DE cap of 1.25 times imposed under the CP/MTN facility. THG’s leverage is expected to rise upon completion of the SCR.

The MARC-2/A ratings on the CP/MTN will be withdrawn upon confirmation from the Trustee on the full repayment and cancellation of the facility.

Contacts:
Hafizan Haron, 03-2090 2238/ hafizan@marc.com.my;
Eric Chua, 03-2090 2245/ cheekiong@marc.com.my