Credit ratings agency S&P has given a triple B+ rating on Australia's biggest gaming firm Tabcorp Holdings Ltd.

Tabcorp yesterday said it plans to spin off its businesses separating its casinos from the management of its betting shops as part of its entitlement offer of A$430 million.

In a report issued to clients today, S&P said it had placed its "BBB+" corporate credit and debt ratings on Tabcorp on CreditWatch with negative implications.

"The proposed demerger of the casino business will reduce Tabcorp's cashflow diversification through loss of casino revenues, which, in addition to the loss of most of its Victorian gaming revenues from 2012, will weaken its business risk profile," S&P credit analyst Gavin Gunning said in a statement.

Melbourne-based Tabcorp, said in a statement Monday that investors would get a share in each company on a 1-for-1 basis, in a split that would be completed in July 2011.

Tabcorp chairman Mr. John Story said on a conference call that two difference companies would enable the two new companies to pursue different growth strategies.

Mr. Story said both businesses would need capital for expansion estimated at A$175-million for the casinos in Queensland state, in addition to the needed repairs in Star City in Sydney.

A related report by Bloomberg indicated that in the said plan, Tabcorp may have issues in terms of bidding for licenses and regulation quoting Mr. Theo Maas of Arnheim Investment Management-Sydney.

"Both of these companies are going to have issues," said Theo Maas, who helps manage A$5 billion of equities at Arnhem Investment Management in Sydney. "There's a lot happening in terms of bidding for licenses and regulation."

Tabcorp, whose shares are halted from trading pending the entitlement offer, closed at A$7.10 on the Australian Securities Exchange on Oct. 15 and has gained 2.2 percent this year. The stock hasn't posted an annual advance since 2006.