Gulf to issue Bt12bn in unsecured debentures rated ‘A-’
TRIS Rating has handed Gulf Energy Development (Gulf) an “A” company rating while rating Gulf’s senior unsecured debentures at “A-” in a Bt12-billion offering.
The debenture’s rating at one notch below the company reflects the structural subordination of the senior unsecured debentures to debt obligations of Gulf’s operating subsidiaries.
The company intends to use the proceeds from the new debentures for business expansion and/or debt repayment.
Gulf said the ratings reflect the company’s position as one of Thailand’s leading power producers, its well-diversified power generation portfolio, predictable cash flows supported by long-term power purchase agreements with the Electricity Generating Authority of Thailand (EGAT, rated “AAA” by TRIS), as well as proven record of developing and operating power plants.
Gulf’s total operating revenue rose sharply to about Bt30 billion in 2019, from Bt17.19 billion in 2018. Its EBITDA (earnings before interest, tax, depreciation, and amortisation) increased to Bt10.54 billion in 2019, from Bt7.84 billion in 2018.
TRIS Rating expects the company to continue its growth path over the next few years, considering the large number of projects in the pipeline. It did not expect the Covid-19 fallout to “materially affect the company’s operating performance”.
On July 7, Gulf announced its 50-per-cent investment in an offshore wind power project with installed capacity of about 465 megawatts in Germany. The project expected to generate EBITDA of about Bt5 billion per year. The investment worth almost Bt20 billion will be initially funded by bank bridging loans. The recent announcement of capital increase worth about Bt32 billion will help strengthen its capital structure and provide more headroom for further investments, said Gulf.
The net interest-bearing debt to equity ratio should drop and below 2 times for the remainder of 2020, it added.
The “stable” outlook reflected the expectation that Gulf plants in operation will run smoothly and generate cash as planned, while plants under construction will commence operations as scheduled, the company said.
