Thai Rating and Information Services Co., Ltd. (TRIS) said that the "A-" ratings it assigned to Banpu PLC's (BANPU) company and issues would remain unchanged following the announcement of potential investment made by BANPU in its bid to acquire the 108-MW power plant from Thai Petrochemical Industry PLC (TPI). The rating agency, however, will closely monitor the acquisition move and assess the full impact on BANPU's credit profile when final terms and conditions are completed.
TRIS said BANPU's potential investment of approximately $100 million for the acquisition of Rayong Energy Co., Ltd.'s 108-MW power plant (Rayong Energy), a subsidiary of TPI, is subject to final terms and conditions that should take about six months to complete. This acquisition of Rayong Energy will be in line with the company's strategy to expand its power business. One of the potential benefits for BANPU is to secure a long-term coal supply contract of around 300,000 tons per year. However, this investment is higher than BANPU's earlier planned capital expenditures and will cause consolidated leverage ratio of the company to be weaker than TRIS's previous expectation. Moreover, this investment plan may also involve additional expansion of Rayong Energy's generating capacity. In such case, BANPU's investment cost will be higher than the initial report and may effect its leverage accordingly.
TRIS emphasized that an extensive review of benefits and risks on this investment must be conducted to derive the full impact to credit profile of the company. TRIS will announce the rating update once it receives final terms and conditions of the transactions.
TRIS added that this power plant uses coal and fuel oil as main energy in generating electricity and steam to supply to companies in the TPI's group as well as other companies nearby. Currently, BANPU's company and issue ratings (BP064A: Bt2,500 million senior debentures due 2006 and BP084A: Bt500 million senior debentures due 2008) are at "A-", TRIS said. -- End
TRIS said BANPU's potential investment of approximately $100 million for the acquisition of Rayong Energy Co., Ltd.'s 108-MW power plant (Rayong Energy), a subsidiary of TPI, is subject to final terms and conditions that should take about six months to complete. This acquisition of Rayong Energy will be in line with the company's strategy to expand its power business. One of the potential benefits for BANPU is to secure a long-term coal supply contract of around 300,000 tons per year. However, this investment is higher than BANPU's earlier planned capital expenditures and will cause consolidated leverage ratio of the company to be weaker than TRIS's previous expectation. Moreover, this investment plan may also involve additional expansion of Rayong Energy's generating capacity. In such case, BANPU's investment cost will be higher than the initial report and may effect its leverage accordingly.
TRIS emphasized that an extensive review of benefits and risks on this investment must be conducted to derive the full impact to credit profile of the company. TRIS will announce the rating update once it receives final terms and conditions of the transactions.
TRIS added that this power plant uses coal and fuel oil as main energy in generating electricity and steam to supply to companies in the TPI's group as well as other companies nearby. Currently, BANPU's company and issue ratings (BP064A: Bt2,500 million senior debentures due 2006 and BP084A: Bt500 million senior debentures due 2008) are at "A-", TRIS said. -- End