Energy Absolute Pcl, a prominent Thai renewable energy firm currently facing significant value loss due to a fraud investigation, has appointed a new CEO in advance of crucial meetings with bondholders to request extended debt repayment terms.
The company announced that it will be engaging with holders of bonds worth around $160 million, which are set to mature this year. These meetings, scheduled to begin next week, follow the appointment of Chatrapon Sripratum as the new CEO. This leadership change comes after founder Somphote Ahunai stepped down last month in the wake of a fraud probe by the Securities and Exchange Commission. Somphote has maintained his innocence regarding the allegations.
Thai regulators are working to mitigate the repercussions for Energy Absolute, whose operations span power generation to the manufacturing of trains, ferries, and buses. The company’s attempts to secure funds for debt repayment encountered obstacles when the market regulator demanded additional information and an industry group prohibited new investments in its securities. Currently, Energy Absolute is burdened with a total debt of approximately $1.8 billion, and its stock has plummeted over 90% this year.
Krung Thai Bank strategist Poon Panichpibool commented via email to the news that extending bond maturities is essential for Energy Absolute to maintain sufficient funding and cash flow. He noted that asset management firms holding EA bonds will likely negotiate to ensure their clients recover some or all of their investments.
Energy Absolute is set to propose a 10-month and 15-day extension for approximately $42 million of bonds due on August 15, offering to increase the coupon rate from 3.11% to 5%. In another meeting, the company will seek a nine-month extension to repay around $110 million of green bonds maturing on September 29, with a proposed increase in the coupon rate from 3.2% to 5%.
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