TRIS Rating Co., Ltd. says today that the credit rating agency views no immediate impact on credit ratings of Banpu PLC (BANPU) after the Civil Court ordered BANPU to pay to the plaintiffs for damages.
On 20 September 2012, BANPU informed the Stock Exchange of Thailand (SET) that the Civil Court has ordered BANPU and its subsidiaries to pay compensation to the Plaintiffs, Mr. Siva Nganthavee and his associated companies, for damages arising from the misuse of information regarding the lignite fired power plant project in Hongsa, Lao PDR. According to the Civil Court order, the compensation comprises compensation for misuse of information worth Bt4,000 million, with 7.5% interest per annum accruing from the date of the complaint. The compensation ordered by the court also includes compensation for the opportunity loss amounting to Bt860 million per year for 2015-2027 and Bt1,380 million per year for 2028-2039. If BANPU has to pay the compensation as per court’s order, the total payment is estimated to be about Bt33,000 million.
BANPU disagrees with the verdict and plans to lodge an appeal at the Court of Appeals. As the final verdict may have to go through higher court, the Appeal Court and possibly the Supreme Court, BANPU is not expected to be liable for any payment in the near term. TRIS expects the verdict of Civil Court will have no immediate impact on BANPU’s creditworthiness as the legal process may continue for quite some times. However, BANPU may be required to set aside provisions for this contingent liability. TRIS Rating will closely monitor the progress of the case and its implications to BANPU’s debt serviceability and financial profile.
BANPU is one of the major energy companies in Asia. It was established in 1983 to mine coal in Thailand. The company has continuously expanded and now has coal operations in Indonesia, China, and Australia. The firm simultaneously increased its investments in the power business in both Thailand and China.
TRIS Rating currently rates BANPU’s company and issue ratings at “AA-” with a “stable” outlook. -- End
TRIS Rating Co., Ltd./www.trisrating.com Contact: santaya@trisrating.com, Tel: 0-2231-3011 ext 500/Silom Complex Building, 24th Floor, 191 Silom Road, Bangkok 10500, Thailand Copyright 2012, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information. All methodologies used can be found at http://www.trisrating.com/en/rating_information/rating_criteria.html.