(The following was released by the rating agency)
SINGAPORE, October 12 (Fitch) Fitch Ratings saysMalaysia-based IOI Corporation Berhad's (IOI) proposal toundertake a mixed-use property development venture in Xiamen,China through its 99.8% subsidiary, Palmy Max Ltd, will notimpact its credit rating. IOI is rated Long-Term Issuer Default'BBB+' with Stable Outlook.
The cash investment made by IOI in the Xiamen project todate is low in relation to the company's scale of operations,MYR2.58bn cash and deposits and short-term investments in fixedincome trust funds of MYR1.78bn outstanding as of 30 June 2012.
Moreover, IOI expects this project to be self-funding innature and therefore unlikely to further increase financialleverage from 1.44x net debt/operating EBITDA as of 30 June2012.
Fitch views the Xiamen project as an opportunisticinvestment and expects IOI to continue focusing on its corebusinesses of crude palm oil plantations and Malaysian propertydevelopment.
Keywords: MARKETS RATINGS XIAMENREALESTATEVENTURE