Bangkok--19 Feb--TRIS Rating
TRIS Rating Co., Ltd. has placed a CreditAlert with “negative” implication for the ratings of CH. Karnchang PLC (CK) and its debentures following a verdict by the Supreme Court overturning the lower court ruling. The Supreme Court ruled on the dispute between BBCD joint venture and the Expressway and Rapid Transit Authority of Thailand (ETA), stating that the ETA has no obligation for additional cost of the Bang Na-Bang Pli-Bang Pakong expressway project. BBCD, a joint venture between CK, Bilfinger Berge, and Dyckerhoff & Widmann, was established to develop the Bang Na-Bang Pli-Bang Pakong expressway project worth approximately Bt25,000 million during 1995-2000.
TRIS Rating said, the Supreme Court’s ruling stated that the ETA does not need to pay any compensation or interest for an increased project cost of Bt6,039 million claimed by BBCD. This verdict will negatively impact CK’s financial profile because the company might have to reverse the project income of Bt2,508 million that was recognized in 2001. The verdict may also trigger a due date for the project’s borrowings. CK’s portion of the borrowings is approximately Bt3,500-
Bt4,000 million.
Currently, TRIS Rating has assigned the “A-” ratings for CK and its senior debentures and is now in the process of reviewing the full impact of this court verdict on CK’s creditworthiness and will announce the rating update to the public after the analysis is complete.