Bangkok--14 Nov--Fitch Ratings
The ratings on Global Power Synergy Public Company Limited (GPSC) remain on Rating Watch Negative (RWN) after the company said it submitted an appeal of the Energy Regulatory Commission's (ERC) order to block GPSC's acquisition of GLOW Energy Public Company Limited (GLOW), Fitch Ratings says.
Fitch said that GPSC's ratings will remain on RWN pending the outcome of the appeal. If GPSC ultimately proves unsuccessful in challenging the ERC's decision and the transaction does not go ahead, Fitch expects GPSC's ratings to be unchanged, given GPSC's financial and business profiles are broadly consistent with those prior to entering into the acquisition.
Should the appeal be successful, the ratings of GPSC would remain on RWN pending further progress in the acquisition. Fitch expects to resolve the RWN once the transaction is completed and there is a greater clarity on the long-term funding and post-transaction capital structure.
Fitch initially placed GPSC's ratings on RWN on 22 June 2018, based on the expectation that GPSC's financial profile will deteriorate, as leverage could worsen to levels that are not in line with its 'A+(tha)' ratings. The acquisition will be initially funded by bridging facilities, which will mature one year from the deal completion. The company plans to complete various transactions, including the issuance of a debenture and an equity injection, which will affect its long-term capital structure.
On RWN resolution, Fitch will also review the improvement in GPSC's business profile in terms of its operating size and scale benefits that would result from the acquisition of GLOW. In addition, Fitch will reassess linkages between GPSC and its parent, PTT Public Company Limited (AAA(tha)/Stable) - Thailand's largest oil and gas company - including any extraordinary support and operational and strategic linkages with the PTT group.