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F and P Finance credit rating may be raised by S&P on Haier's offer

Thursday 13th September 2012

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Fisher & Paykel Finance's credit rating could be raised one notch to BB+ by Standard & Poor's because a takeover of parent Fisher & Paykel Appliances by China's Haier is likely to bolster its credit profile.

Haier has offered $1.20 a share for the 80 percent of FPA it doesn't already own and has agreement from Allan Gray Australia to sell its 17.46 percent into the offer, giving Haier an interest in 37.46 percent. It wants a minimum 50 percent of the company, ensuring control, for its offer to succeed.

"We believe that the current takeover is likely to result in an improvement in the credit profile" of FPA, S&P said in a statement. Raising the finance unit's rating to BB+ from BB would lift it to a level consistent with the stand-alone credit profile, it said.

The finance business, though, is likely to remain a non-strategic subsidiary of Haier, which doesn't have a credit rating, meaning the business isn't likely to result in any additional support from the parent, S&P said.

There was a risk that Haier could even allow a weaker capitalisation of the finance business, though this was remote, given its potential impact and the possibility that the business sold in future.

Shares of FPA rose 0.4 percent to $1.17 today.

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