Bigger, bolder Chinese mergers and acquisitions on the way: S&P

London (Platts)--25Jul2006

Standard & Poor's Ratings Services predicted another record year for
Chinese mergers and acquisitions, the ratings company said in a report
Tuesday. The ratings agency expected to see significant inwards investment in
chemicals, and outwards investments in oil and gas.
S&P however warned that the credit health of some companies could be at
risk. "If they absorb excessively high debt, levels from target assets or
over-leverage to pay for acquisitions, their credit health could become
strained," said credit analyst John Bailey.
Many of the biggest Chinese companies have built up large cash war chests
through equity issuance and free cash flow generation, and they're eager to
spend. Some need to invest in raw materials, others are looking to grow.

-----Ihsan Rahim, ihsan_rahim@platts.com

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