TRIS Rating Assigns “AA-/Stable” Rating to Senior Unsecured Debt Worth Up

TRIS Rating affirms the company rating on Global Power Synergy PLC (GPSC) and its existing senior unsecured debentures at “AA-” with a “stable” outlook. At the same time, TRIS Rating assigns a rating of “AA-” to GPSC’s proposed issue of up to THB5 billion in senior unsecured debentures. The proceeds from the proposed debentures will be used for financing GPSC’s renewable projects.

The ratings on GPSC and its debentures reflect the company’s position as one of the major private power producers in Thailand, highly predictable cash flow from its long-term power purchase agreements (PPA) with the Electricity Generating Authority of Thailand (EGAT) and the PTT Group, and the company’s prudent financial policy. The ratings also reflect GPSC’s important role as a flagship company in the power business under the PTT Group. The ratings take into consideration the company’s rising debt level following the acquisition of Glow Energy PLC (GLOW).

For the first quarter of 2020, GPSC’s revenue stood at THB18.5 billion, a 102% growth year-on-year (y-o-y). Earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at THB5.5 billion, up from THB2.3 billion from the same period in 2019. The revenue and EBITDA increase was mainly due to full quarter recognition of GLOW’s revenue. The adjusted net debt was at THB91.4 billion, up from THB88.3 billion at the end of 2019. The adjusted net debt to EBITDA was at 4.1 times, improved from 4.7 times at the end of 2019.

RATING OUTLOOK

The “stable” outlook reflects TRIS Rating’s expectation that the plants in operation will continue to run smoothly and generate cash as forecast. In addition, we also expect the company to deleverage its capital structure as planned.

RATING SENSITIVITIES

A rating upgrade could occur if GPSC can smoothly integrate the power portfolio with GLOW as planned. Conversely, a rating downgrade could occur if the cash flow from operation is materially lower than expected or if the capital structure weakens significantly due to excessive debt-funded investments.

RELATED CRITERIA

- Rating Methodology – Corporate, 26 July 2019

- Key Financial Ratios and Adjustments, 5 September 2018

- Group Rating Methodology, 10 July 2015

Global Power Synergy PLC (GPSC)

Company Rating: AA-

Issue Ratings:

GPSC22NA: THB2,000 million senior unsecured debentures due 2022 AA-

GPSC24NA: THB5,000 million senior unsecured debentures due 2024 AA-

GPSC26NA: THB6,000 million senior unsecured debentures due 2026 AA-

GPSC29NA: THB8,000 million senior unsecured debentures due 2029 AA-

GPSC31NA: THB7,500 million senior unsecured debentures due 2031 AA-

GPSC34NA: THB6,500 million senior unsecured debentures due 2034 AA-

Up to THB5,000 million senior unsecured debentures due within 15 years AA-

Rating Outlook: Stable

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TRIS Rating Assigns “AA-/Stable” Rating to Senior Unsecured Debt Worth Up to THB5,000 Million of “GPSC”