Turmoil and Leadership Change at Energy Absolute Amid Debt Crisis
Renewable Energy Giant Appoints New CEO as It Faces Financial Turmoil and Fraud Allegations
Renewable Energy Giant Appoints New CEO as It Faces Financial Turmoil and Fraud Allegations
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Thai Renewable Energy Firm Faces Financial Struggles and Fraud Allegations, Appoints New CEO Ahead of Crucial Debt Negotiations
Energy Absolute Pcl, a leading Thai renewable energy company, is undergoing significant changes as it grapples with a severe financial crisis exacerbated by a fraud investigation. The firm, which has seen its value dramatically decrease, has appointed Chatrapon Sripratum as the new CEO in preparation for vital meetings with bondholders to discuss extended debt repayment terms.
The company will soon engage with holders of approximately $160 million in bonds set to mature this year. These discussions are scheduled to begin next week, following the recent resignation of founder Somphote Ahunai, who stepped down last month amidst a fraud probe by the Securities and Exchange Commission. Despite the allegations, Somphote maintains his innocence.
Thai regulators are actively working to mitigate the fallout for Energy Absolute, which operates across power generation and the manufacturing of trains, ferries, and buses. However, the company’s efforts to secure funds for debt repayment have faced challenges. The market regulator has demanded additional information, and an industry group has prohibited new investments in the company’s 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 highlighted the importance of extending bond maturities 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 plans 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%. Additionally, 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%.
As Energy Absolute navigates this turbulent period, the company’s new leadership and strategic negotiations with bondholders will be crucial in determining its financial stability and future in the renewable energy sector.
