TRIS Rating Co., Ltd. has placed a CreditAlert with “negative” implication for the ratings of CH. Karnchang PLC (CK) and its debentures following a verdict by the Supreme Court overturning the lower court ruling. The Supreme Court ruled on the dispute between BBCD joint venture and the Expressway and Rapid Transit Authority of Thailand (ETA), stating that the ETA has no obligation for additional cost of the Bang Na-Bang Pli-Bang Pakong expressway project. BBCD, a joint venture between CK, Bilfinger Berge, and Dyckerhoff & Widmann, was established to develop the Bang Na-Bang Pli-Bang Pakong expressway project worth approximately Bt25,000 million during 1995-2000.
TRIS Rating said, the Supreme Court’s ruling stated that the ETA does not need to pay any compensation or interest for an increased project cost of Bt6,039 million claimed by BBCD. This
verdict will negatively impact CK’s financial profile because the company might have to reverse
the project income of Bt2,508 million that was recognized in 2001. The verdict may also trigger a
due date for the project’s borrowings. CK’s portion of the borrowings is approximately Bt3,500-
Bt4,000 million.
Currently, TRIS Rating has assigned the “A-” ratings for CK and its senior debentures and is now in the process of reviewing the full impact of this court verdict on CK’s creditworthiness and will announce the rating update to the public after the analysis is complete. -- End
-------------------------------------------------------
Copyright 2007, 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.
TRIS Rating said, the Supreme Court’s ruling stated that the ETA does not need to pay any compensation or interest for an increased project cost of Bt6,039 million claimed by BBCD. This
verdict will negatively impact CK’s financial profile because the company might have to reverse
the project income of Bt2,508 million that was recognized in 2001. The verdict may also trigger a
due date for the project’s borrowings. CK’s portion of the borrowings is approximately Bt3,500-
Bt4,000 million.
Currently, TRIS Rating has assigned the “A-” ratings for CK and its senior debentures and is now in the process of reviewing the full impact of this court verdict on CK’s creditworthiness and will announce the rating update to the public after the analysis is complete. -- End
-------------------------------------------------------
Copyright 2007, 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.