SINGAPORE (Standard&Poor's) March 20, 2008--Standard&Poor's Ratings Services said today that its rating and outlook on Malaysia's IOI Corp. Bhd.'s (IOI, BBB+/Negative/--) are unaffected by the recent announcement on the acquisition of oil palm plantations in Sarawak, for about Malaysian ringgit (MYR) 474 million including net debt consideration, even after factoring in planting capital expenditure. The proposed acquisition would largely be funded by the recent US$600 million convertible bonds issue. Although we view this to be within IOI's key business focus, the company's current credit profile is now highly vulnerable to future leveraged growth, shareholder-focused initiatives and softening market conditions, considering the cumulative impact of the leveraged acquisitions and shareholder friendly actions in the past one year.
