TRIS Rating Co., Ltd. has affirmed the company rating of Banpu PLC (BANPU) and the ratings of its current debentures at "A" and has assigned the ratings of BANPU's proposed Bt1,500 million and Bt500 million senior debentures at "A". The ratings reflect BANPU's capable and experienced management team, its leading position in Thailand's coal market and its diversified base of coal reserves as well as diversification into the power business. However, these strengths are partly offset by the risk of operating in Indonesia, a politically unstable country. The ratings also take into consideration BANPU's greater exposure in international markets, which have more intense competition than the domestic market, as well as the high capital expenditures required to expand its coal operation in Indonesia.
TRIS Rating reported that BANPU was founded by the Vongkusolkit and Auapinyakul families and started its mining operation in 1983. As of September 2003, BANPU had total coal reserves of 170 million tonnes with mining rights in Thailand and Indonesia. More than 90% of its coal reserves are in Indonesia and are geographically diverse, located in South Kalimantan, Sumatra, East Kalimantan and South Sumatra. The quality of BANPU's coal reserves in Indonesia is better than in Thailand because the calorific value of the Indonesian reserves ranges from 5,500 to 7,200 kilocalories per kilogram (Kcal/kg.) while the calorific value of its coal reserves in Thailand is between 3,500 to 5,400 Kcal/kg. As of September 2003, BANPU's production capacity is 15.3 million tones per year, located primarily in Indonesia, which accounts for roughly 82% of total production capacity. BANPU has maintained its leading position in the Thai coal mining market, holding 35% of the market served by private sector operators. More than 20 years' experience in the industry enables the company to successfully expand its coal operations in Indonesia. Currently, BANPU ranks among the top five coal producers in Indonesia. Having a variety of coal sources as well as different grades of coal strengthens its competitive advantage in international markets.
TRIS Rating said, BANPU's coal operation in Indonesia performs satisfactorily. Coal production from Indonesian mines increased from 9 million tones in 2002 to approximately 12 million tonnes in 2003. As of September 2003, BANPU's total investments in Indonesia were worth approximately US$166.1 million, or about 25% of its total assets, which included equity investments and loans to subsidiaries in Indonesia. In January 2004, BANPU announced a US$12.5 million investment (99% stake) in PT Bharainto Ekatama, with estimated coal reserves of around 40 million tonnes located in Kalimantan. In August 2003, BANPU acquired an 18.8% stake in Asian American Coal Inc. (AACI), which holds a 56% stake in Shanxi Asian American-Daning Energy (SAADEC). SAADEC operates an underground coal mine in China which was granted a 25-year concession from the Chinese government to develop coal mines in Shanxi province with 79 million tonnes of reserves. SAADEC has a total production capacity of four million tonnes per annum and is expected to start coal production in 2005. Although this investment is in line with BANPU's strategy to become a regional energy player and helps diversify its coal reserves and production base, TRIS Rating will closely monitor the risks inherent in operating an underground mine in China.
As of December 2003, BANPU's investment value in the power business totaled approximately Bt8,000 million or 18% of total assets. The investments in power projects consist of Ratchaburi Electricity Generating Holding PLC (RATCH) (14.99%), BLCP Power Ltd. (BLCP) (50%) and a small power plant in Vietnam (30%). Although BANPU divested its 37.5% stake in Tri Energy Co., Ltd. (TECO) in November 2003, which operates a 700 MW gas-fired combined cycle power plant in Thailand, BANPU expects to receive annual dividend income from RATCH of approximately Bt400 million to Bt500 million. The recent memorandum of understanding between BANPU and the Electricity Generating Authority of Thailand (EGAT) to sell BANPU's 14.99% stake in RATCH and purchase EGAT's 24.93% ownership of Electricity Generating PLC (EGCOMP) will not significantly affect the creditworthiness of BANPU in the short run because BANPU is expected to receive around Bt400 million to Bt500 million in dividends from EGCOMP instead. However, BANPU will pay approximately Bt2,500 million to EGAT for this transaction with the funds coming from new financing and cash on hand. In addition, this transaction will be finalized within February 2004, TRIS Rating said.-- End
Banpu PLC (BANPU)Company Rating: Affirmed at AIssue Ratings: BP064A: Bt2,500 million senior debentures due 2006 Affirmed at A
BP084A: Bt500 million senior debentures due 2008 Affirmed at A
BP082A: Bt3,000 million senior debentures due 2008 Affirmed at A
BP109A: Bt2,000 million senior debentures due 2010 Affirmed at A
BP111A: Bt1,500 million senior debentures due 2011 A
BP093A: Bt500 million senior debentures due 2009 A
TRIS Rating reported that BANPU was founded by the Vongkusolkit and Auapinyakul families and started its mining operation in 1983. As of September 2003, BANPU had total coal reserves of 170 million tonnes with mining rights in Thailand and Indonesia. More than 90% of its coal reserves are in Indonesia and are geographically diverse, located in South Kalimantan, Sumatra, East Kalimantan and South Sumatra. The quality of BANPU's coal reserves in Indonesia is better than in Thailand because the calorific value of the Indonesian reserves ranges from 5,500 to 7,200 kilocalories per kilogram (Kcal/kg.) while the calorific value of its coal reserves in Thailand is between 3,500 to 5,400 Kcal/kg. As of September 2003, BANPU's production capacity is 15.3 million tones per year, located primarily in Indonesia, which accounts for roughly 82% of total production capacity. BANPU has maintained its leading position in the Thai coal mining market, holding 35% of the market served by private sector operators. More than 20 years' experience in the industry enables the company to successfully expand its coal operations in Indonesia. Currently, BANPU ranks among the top five coal producers in Indonesia. Having a variety of coal sources as well as different grades of coal strengthens its competitive advantage in international markets.
TRIS Rating said, BANPU's coal operation in Indonesia performs satisfactorily. Coal production from Indonesian mines increased from 9 million tones in 2002 to approximately 12 million tonnes in 2003. As of September 2003, BANPU's total investments in Indonesia were worth approximately US$166.1 million, or about 25% of its total assets, which included equity investments and loans to subsidiaries in Indonesia. In January 2004, BANPU announced a US$12.5 million investment (99% stake) in PT Bharainto Ekatama, with estimated coal reserves of around 40 million tonnes located in Kalimantan. In August 2003, BANPU acquired an 18.8% stake in Asian American Coal Inc. (AACI), which holds a 56% stake in Shanxi Asian American-Daning Energy (SAADEC). SAADEC operates an underground coal mine in China which was granted a 25-year concession from the Chinese government to develop coal mines in Shanxi province with 79 million tonnes of reserves. SAADEC has a total production capacity of four million tonnes per annum and is expected to start coal production in 2005. Although this investment is in line with BANPU's strategy to become a regional energy player and helps diversify its coal reserves and production base, TRIS Rating will closely monitor the risks inherent in operating an underground mine in China.
As of December 2003, BANPU's investment value in the power business totaled approximately Bt8,000 million or 18% of total assets. The investments in power projects consist of Ratchaburi Electricity Generating Holding PLC (RATCH) (14.99%), BLCP Power Ltd. (BLCP) (50%) and a small power plant in Vietnam (30%). Although BANPU divested its 37.5% stake in Tri Energy Co., Ltd. (TECO) in November 2003, which operates a 700 MW gas-fired combined cycle power plant in Thailand, BANPU expects to receive annual dividend income from RATCH of approximately Bt400 million to Bt500 million. The recent memorandum of understanding between BANPU and the Electricity Generating Authority of Thailand (EGAT) to sell BANPU's 14.99% stake in RATCH and purchase EGAT's 24.93% ownership of Electricity Generating PLC (EGCOMP) will not significantly affect the creditworthiness of BANPU in the short run because BANPU is expected to receive around Bt400 million to Bt500 million in dividends from EGCOMP instead. However, BANPU will pay approximately Bt2,500 million to EGAT for this transaction with the funds coming from new financing and cash on hand. In addition, this transaction will be finalized within February 2004, TRIS Rating said.-- End
Banpu PLC (BANPU)Company Rating: Affirmed at AIssue Ratings: BP064A: Bt2,500 million senior debentures due 2006 Affirmed at A
BP084A: Bt500 million senior debentures due 2008 Affirmed at A
BP082A: Bt3,000 million senior debentures due 2008 Affirmed at A
BP109A: Bt2,000 million senior debentures due 2010 Affirmed at A
BP111A: Bt1,500 million senior debentures due 2011 A
BP093A: Bt500 million senior debentures due 2009 A