RATCH's finance remains strong despite buyout of Tri Energy: S&P
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Ratchaburi Electricity Generating Holding's buyout of the remaining stake in Tri Energy (TECO) will have no impact on its credit rating, according to Standard & Poor's Ratings Services.
Ratchaburi, now rated "BBB+" with stable outlook, announced earlier the plan to buy the 50 per cent stake from Chevron Corp.
"The transaction would marginally improve RATCH's competitive position with almost no impact on the company's financial metrics," S&P said in a statement.
Through the purchase, the company's generation capacity will increase by about 5 per cent and its scale of operations will improve because Tri Energy's power plant is located near a key part of its existing generation capacity (6543 megawatt in total).
"In our view, the US$21 million buyout will have minimal impact on Ratch's financial strength because the company has cash and equivalents of about Bt5 billion as of September 30 and TECO's debt is not significant enough to affect the company's balance sheet."
TECO's power plant has 6.5 remaining years before the expiry of the power purchase agreement in 2020 although RATCH intends to extend the contract.
