CK Power Plc has issued 4 billion baht in debentures to expand its renewable power projects and increase shareholding in its associated company.
Thanawat Trivisvavet, managing director of CK Power, said the company issued the debentures last week to institutional and high net worth investors. The debentures were well-received with demand of over two times the issue size, reflecting investor confidence in CK Power and its management capability, he said.
The debentures offered are name-registered, unsubordinated and unsecured; there is a debenture holders' representative; and they are divided into three tranches.
The tranches consist of 1.5 billion baht in debentures with a tenure of three years and an interest rate of 1.74% per year; 1 billion baht in debentures with a tenure of five years and an interest rate of 2.45% per year; and 1.5 billion baht in debentures with a tenure of seven years.
The issuer has a right to early redemption at an interest rate of 3.02% per year. The three tranches of debentures received a credit rating of A-/stable by Tris Rating on April 30 this year.
Mr Thanawat said part of the proceeds from the issuance of these new debentures will go towards paying off outstanding debentures maturing in June 2021.
The remainder is earmarked for asset acquisition or investment in related businesses, including a feasibility study of the Luang Prabang hydroelectric power project, as well as for working capital in the company's operations.
The success of this debenture issuance is partly due to the company's ability to generate revenue, profit and cash flow, as well as its ability to efficiently manage its power plants, he said.
In the first quarter of 2021, CK Power recorded total revenue of 2.1 billion baht, an increase of 339 million or 19.2% from the same period last year. Net profit attributable to equity holders stood at 115 million baht, an increase of 454 million or 134% from the same period last year.
In addition, Tris Rating affirmed the company's rating at A/stable in 2021, Mr Thanawat said.
In the second half this year, the company plans to issue additional debentures valued at around 2 billion baht to support the acquisition of an additional 5% of shares in Xayaburi Power Co (XPCL), which owns and operates Xayaburi hydroelectric power plant in Laos. The total amount is worth 1.83 billion baht, as approved by the 2021 annual general meeting of shareholders in April.
After the acquisition, which is scheduled to be completed in the third quarter of 2021, CK Power's shareholding in XPCL increases from 37.5% to 42.5%. The plan for additional debenture issuance is subject to prevailing market conditions at that time.