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S&P: Shinsegae on watch
Standard & Poor's said it placed the A- long-term corporate credit rating on Shinsegae Co. Ltd. on CreditWatch with negative implications after the company's board of directors approved its demerger into two separate businesses.
The CreditWatch does not affect the A- senior unsecured bond rating on the company's $200 million notes due June 2011, S&P said.
The demerger, scheduled for May 1, will see the company separate its department store business into a new company named Shinsegae and its hypermarket business into a new company named E-Mart, the agency said.
The current Shinsegae's rated debt will be transferred to E-Mart.
At the time of the demerger, S&P said it will assign new ratings to E-mart.
The CreditWatch placement reflects the new Shinsegae's weaker business risk profile in regard to its competitiveness and business diversification after the carve-out of its hypermarket business, S&P said.
But the bond rating will not be affected because the rated debt will be transferred to E-Mart, the agency said.
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