Moody’s sees no impact on IOI’s ratings from equity offering

Singapore, July 27, 2009 -- Moody's Investors Service sees no rating
impact from IOI Corporation Berhad's (IOI) announcement of a proposed
equity offering in the form of a renounceable rights issue for a gross
amount of RM1.22 billion.

IOI ratings are Baa1 with negative outlook.

The proposed renounceable rights issue -- still subject to approval from
shareholders and regulators -- will take around three months to complete.
The proceeds will be used for planned capital expenditures, potential
investments, debt repayments and working capital purposes for the next
two years.

"The cash injection from the potential rights issue, if completed, will
lead to an improvement in IOI's liquidity profile, but it will not be
significant enough to change the current rating and its outlook," says
Kathleen Lee, a Moody's VP/Senior Analyst.

"Moody's considers that in the context of challenging conditions in the
palm oil and property markets in Malaysia and Singapore, improvements
instead in profitability and a reduction of net exposures to derivatives
would have relatively more impact on its current ratings outlook," says
Lee, also Moody's lead analyst for the company.

The last rating action with regard to IOI was taken on 2 March, 2009,
when the outlook for the company's issuer and debt ratings were changed
to negative from stable.

IOI's ratings have been assigned based on factors that Moody's believe
are relevant to the risk profile of IOI, such as the company's (i)
business risk and competitive position compared with other firms within
the industry; (iii) capital structure and financial risk; (iii)
projected performance over the near to intermediate term; and (iv)
management's track record and tolerance for risk. These attributes were
compared against other issuers both within and outside IOI's core
industry; IOI's ratings are believed to be comparable to those of other
issuers of similar credit risk.

IOI Corporation Berhad is headquartered in Malaysia and listed on Bursa
Securities Malaysia. The company is involved in oil palm plantations and
resource-based manufacturing, including olechemicals, as well as
specialty oils and fats. It is also a property development and investment
group.

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