TRIS Rating Co., Ltd. has placed the company and issue ratings of BANPU PLC (BANPU) on CreditAlert with “developing” implication. The rating action follows the announcement of the Banpu Group on 5 July 2010 that BANPU plans to purchase all (100%) of the equity of Centennial Coal Co., Ltd. (CEY) via its wholly-owned subsidiary, Banpu Minerals (Singapore) Pte Ltd. The Banpu Group currently holds 19.9% of CEY. CEY is a coal mining company in New South Wales, Australia, supplying thermal coal to domestic and export markets.
Under the terms of the offer, the Banpu Group will acquire 80.1% of the common stock of CEY at A$6.20 per share. The offer will be subject to certain requirements, including approval from BANPU’s shareholders and the Foreign Investment Review Board of Australia, and achievement of a relevant interest in CEY denoted by 50.1% of total shares outstanding.
TRIS Rating said, BANPU is one of the major energy companies in Asia. It was established in 1983 to mine coal in Thailand. The company has continuously expanded and now has coal operations in Indonesia and China. The firm simultaneously increased its investments in the power business in both Thailand and China. In 2009, the coal business accounted for 78% of earnings before interest, tax, depreciation and amortization (EBITDA); while the remaining 22% was from the power business. In terms of geographic diversification, 77% of EBITDA in 2009 was from the Indonesian operation and 23% was from China.
TRIS Rating said about the acquisition of CEY that it is in line with the Banpu Group’s long-term strategy to focus on coal business. This investment will diversify its coal mining resources and enhance growth opportunity in Australia although this transaction will increase the firm’s leverage in the short term. TRIS Rating will conduct an extensive analysis to determine the full impact of the transaction on BANPU’s credit profile and will resolve its CreditAlert once crucial terms and conditions of the tender offer are finalized. -- End
Company Rating: AA- Issue Ratings: BP109A: Bt2,000 million senior debentures due 2010 AA- BP10NA: Bt1,500 million senior debentures due 2010 AA- BP10NB: Bt1,000 million senior debentures due 2010 AA- BP111A: Bt1,500 million senior debentures due 2011 AA- BP125A: Bt2,000 million senior debentures due 2012 AA- BP145A: Bt2,200 million senior debentures due 2014 AA- BP15NA: Bt2,500 million senior debentures due 2015 AA- BP165A: Bt2,100 million senior debentures due 2016 AA- CreditAlert Designation: Developing
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