TRIS Rating Co., Ltd. today reported that the credit profile of Eastern Water Resources Development and Management PLC (EASTW) has not been impacted after its subsidiary, Eastern Hobas Pipes Co., Ltd. (EHP), missed payments on its loans, which in turn prompted EASTW to breach the covenants of its debentures and certain borrowing agreements.
On 20 August 2007, EASTW, a raw water operator in the Eastern Seaboard area, announced that EHP failed to meet timely payments of interest and principal on its loans with Thai Military Bank PLC (TMB), resulting in a total default amount of Bt303.08 million as of 28 June 2007.
The default by EHP has led EASTW to breach the covenants of its debentures and certain loan agreements as EHP’s defaulted amount is more than 5% of EASTW’s shareholders’ equity as of 30 September 2006, its latest fiscal year end period. The breach gives rights to EASTW’s bondholders to call for an early redemption of its existing debentures, totaling Bt2,500 million, said TRIS Rating.
EHP, a 50:50 joint venture between EASTW and HOBAS Engineering GmbH from Austria, is engaged in the manufacturing of Centrifugally Cast Glassfiber Reinforced Polyester (CC-GRP) pipes. The company has been unable to turn profitable over the past few years due to delays of several large infrastructure projects, which are its main target customers.
In late 2006, EASTW breached its indenture by having the ratio of net debt to earnings before interest, tax, depreciation, and amortization (EBITDA) marginally exceeding the covenant limits at 4.5 times. The bondholders later voted to waive the breach.
TRIS Rating said it expects EASTW to receive a waiver from the bondholders; though it will closely monitor any developments of the situation. EASTW and its existing debentures are currently rated “A+” with “stable” outlook by TRIS Rating. -- 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.
On 20 August 2007, EASTW, a raw water operator in the Eastern Seaboard area, announced that EHP failed to meet timely payments of interest and principal on its loans with Thai Military Bank PLC (TMB), resulting in a total default amount of Bt303.08 million as of 28 June 2007.
The default by EHP has led EASTW to breach the covenants of its debentures and certain loan agreements as EHP’s defaulted amount is more than 5% of EASTW’s shareholders’ equity as of 30 September 2006, its latest fiscal year end period. The breach gives rights to EASTW’s bondholders to call for an early redemption of its existing debentures, totaling Bt2,500 million, said TRIS Rating.
EHP, a 50:50 joint venture between EASTW and HOBAS Engineering GmbH from Austria, is engaged in the manufacturing of Centrifugally Cast Glassfiber Reinforced Polyester (CC-GRP) pipes. The company has been unable to turn profitable over the past few years due to delays of several large infrastructure projects, which are its main target customers.
In late 2006, EASTW breached its indenture by having the ratio of net debt to earnings before interest, tax, depreciation, and amortization (EBITDA) marginally exceeding the covenant limits at 4.5 times. The bondholders later voted to waive the breach.
TRIS Rating said it expects EASTW to receive a waiver from the bondholders; though it will closely monitor any developments of the situation. EASTW and its existing debentures are currently rated “A+” with “stable” outlook by TRIS Rating. -- 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.