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The international rating agency said its BBB+ rating with a stable outlook on Sime Darby is based on the group's consolidated profile. "The rating factors in the group's strong operational and strategic linkages with its key subsidiaries, including the plantation and property divisions, in addition to its ownership of 100% stakes in the subsidiaries," said Fitch in a statement today. Quotes in the article 0.00% Thus, should Sime Darby lose its controlling stakes in the units, with the intention of creating independent plantation and property-focused entities with minimal operational or strategic overlap with the remaining business, Sime Darby's cash flows would be significantly reduced and it would likely see higher earnings volatility, leading to a weaker business profile. On Jan 26, 2017, Sime Darby announced that it plans to create plantation and property pure plays to be listed on Bursa Malaysia. "The listed entities will bear the Sime Darby brand name and focus on their respective core activities. The group intends to keep its key heavy equipment (industrial) and automotive (motor) dealership businesses and retain its listed status. However, details regarding proposed shareholdings and debt structures for the various entities are currently unavailable," said Fitch. The plantation and property divisions together contributed around 70% of Sime Darby's consolidated earnings before interest, tax, depreciation and amortisation (ebitda) in the financial year ended June 30, 2016 (FY16). Fitch noted that the group's consolidated ebitda declined by around 20% over the three-year period to FY16.

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