Thirteen financial institutions and funds have agreed to provide three-year loans worth 8 billion baht to Energy Absolute Plc (EA) to ease the short-term liquidity crunch faced by the embattled renewable energy firm.
Chief financial officer Vasu Klomkliang said EA signed a three-year loan agreement with nine Thai and international financial institutions as well as four funds under Asset Plus Fund Management to support the company repaying its loans and bills of exchange (B/Es).
EA will allocate cash flow from the operations of its power plants that have already signed power purchase agreements to repay the loans, said Mr Vasu.
"The confirmation of loans granted by these nine financial institutions and four funds affirms that EA is still operating and it recognises the revenue generated from normal business operations," he said.
This loan will ensure that EA has no liquidity problems in repaying short-term loans and B/Es next year, said Mr Vasu, who was named chief financial officer of EA at the start of this month.
His appointment followed the resignation of the company's founder and former chief executive Somphote Ahunai and his deputy Amorn Sapthaweekul after the Securities and Exchange Commission last month said it was investigating Mr Somphote and other EA executives for possible fraud.
The bondholders of EA248A bonds on Friday approved a delay of the 1.5-billion-baht bond by nine months and 16 days from Aug 15.
The company will hold another bondholders' meeting on Aug 14 to reschedule the payment of EA249A, worth 4 billion baht, due on Sept 29.
EA plans to increase the interest rate to 5% per year for both series, from 3.11% and 3.2%, and provide additional collateral to avoid this being considered a default event.
"The rescheduling of the two tranches of debentures is a win-win solution for all parties, paving the way for EA's newly appointed executives to lead the company towards a business turnaround," said Mr Vasu.
He said after the postponement of the redemption of both series, debenture holders will receive full repayment within 10 months, earlier than the financial institutions and Asset Plus funds would for the three-year loan.
In addition to cash flow from business operations, Mr Vasu said EA is negotiating with new strategic partners and considering the sale of some assets to an infrastructure fund to repay these two tranches of debentures and strengthen its long-term financial stability.
The company is confident that if everything goes according to plan, its performance will return to growth and it can repay all loans and debentures due in the future, he said.
"This will be a long-term solution for the company and a win-win solution for financial institutions and debenture holders," said Mr Vasu.