Credit quality of acquisition-hungry Thai firms may suffer: S&P

THE credit quality of Thai companies over the next 12 months could take a hit given their strong appetite for acquisitions and elevated capital spending particularly in the past two years, said Standard & Poor's Rating Services

"Thai companies have been among the most acquisitive in Asean. And most of the large acquisitions over the past two years have been debt-funded," said Standard & Poor's credit analyst, Xavier Jean, in a report which is part of a series on Asean top companies.

Thai conglomerates and their subsidiaries have been actively snapping up assets both domestically and abroad and some of them have stretched their balance sheets in doing so. One major deal which galvanised the mergers and acquisitions space here in Singapore was the US$11.2 billion debt-funded takeover of Fraser & Neave by Thai billionaire Charoen Sirivadhanabhakdi last year.