TRIS Rating Co., Ltd. said the MOU between Banpu and EGAT is not likely to significantly affect the creditworthiness of Ratch, Kegco and Banpu in the short-run.
According to the MOU, Banpu will sell its 14.99% stake in Ratch to EGAT. The sales price will be Bt 43.86 per share, totaling around Bt 9,535 million. At the same time, Banpu will purchase EGAT's 24.99% ownership of Egcomp at Bt 82.58 per share, totaling around Bt 10,865 million. Furthermore, CLP will purchase EGAT's 0.42% stake in Egcomp at the same price. According to Securities and Exchange Commission regulations, EGAT has to make a tender offer for all shares of Ratch from the remaining shareholders. The relevant sale and purchase agreements will be executed within January 2004, and if all terms and conditions have been fulfilled, the payment will take place within February 2004.
TRIS Rating noted that if this transaction is completed, Banpu will become the largest shareholder of Egcomp, holding 24.99% while EGAT's stake in Egcomp would fall to zero. EGAT's stake in Ratch would increase from 45% to 60%, which will change the status of Ratch from a private company to become a state enterprise as defined by Thai law. The relationship between Ratch and EGAT will be closer and will provide direct privileges to Ratch to expand its power projects in the future.
The credit profiles of all parties involved should have no significant change as a result of this transaction. If EGAT increases its stake in Ratch, there should be no significant impact on the credit risk of Ratch and Ratchgen. With respect to Kegco, a wholly-owned subsidiary of Egcomp, a change in Egcomp's shareholding structure should have no immediate impact on Kegco's creditworthiness. For Banpu, the 24.99% ownership in Egcomp will give Banpu more management control than its former 14.99% stake in Ratch and also remove some constraints in new power plant investments.
TRIS Rating said it would continue to monitor the effect of the share swap transaction between Banpu and EGAT. The credit ratings of the companies involved with this transaction as of 9 January 2004 are Banpu PLC ("A" ratings for the company and for issues BP064A, BP084A, BP082A and BP109A), Khanom Electricity Generating Co., Ltd. or Kegco (a "A+" issue rating), Ratchaburi Electricity Generating Holding PLC or Ratch (a "A+" company rating) and Ratchaburi Electricity Generating Co., Ltd. or Ratchgen (a "AA-" company rating). -- End
According to the MOU, Banpu will sell its 14.99% stake in Ratch to EGAT. The sales price will be Bt 43.86 per share, totaling around Bt 9,535 million. At the same time, Banpu will purchase EGAT's 24.99% ownership of Egcomp at Bt 82.58 per share, totaling around Bt 10,865 million. Furthermore, CLP will purchase EGAT's 0.42% stake in Egcomp at the same price. According to Securities and Exchange Commission regulations, EGAT has to make a tender offer for all shares of Ratch from the remaining shareholders. The relevant sale and purchase agreements will be executed within January 2004, and if all terms and conditions have been fulfilled, the payment will take place within February 2004.
TRIS Rating noted that if this transaction is completed, Banpu will become the largest shareholder of Egcomp, holding 24.99% while EGAT's stake in Egcomp would fall to zero. EGAT's stake in Ratch would increase from 45% to 60%, which will change the status of Ratch from a private company to become a state enterprise as defined by Thai law. The relationship between Ratch and EGAT will be closer and will provide direct privileges to Ratch to expand its power projects in the future.
The credit profiles of all parties involved should have no significant change as a result of this transaction. If EGAT increases its stake in Ratch, there should be no significant impact on the credit risk of Ratch and Ratchgen. With respect to Kegco, a wholly-owned subsidiary of Egcomp, a change in Egcomp's shareholding structure should have no immediate impact on Kegco's creditworthiness. For Banpu, the 24.99% ownership in Egcomp will give Banpu more management control than its former 14.99% stake in Ratch and also remove some constraints in new power plant investments.
TRIS Rating said it would continue to monitor the effect of the share swap transaction between Banpu and EGAT. The credit ratings of the companies involved with this transaction as of 9 January 2004 are Banpu PLC ("A" ratings for the company and for issues BP064A, BP084A, BP082A and BP109A), Khanom Electricity Generating Co., Ltd. or Kegco (a "A+" issue rating), Ratchaburi Electricity Generating Holding PLC or Ratch (a "A+" company rating) and Ratchaburi Electricity Generating Co., Ltd. or Ratchgen (a "AA-" company rating). -- End