Energy Absolute Plc (EA), a renewable energy and electric vehicle (EV) developer and operator, won near-unanimous shareholder support to raise 7.4 billion baht from a rights offering to existing shareholders, using the funds to solidify its recovery after five months of intensive restructuring within the group.
The company’s EV and battery businesses were restructured in response to economic changes to achieve long-term growth.
“We are pleased to have stabilised the business by making some tough decisions, returning to a positive cashflow and sustaining our profitability by focusing on our profitable businesses and restructuring money-losing operations,” said chief executive Chatrapon Sripratum.
FINANCIAL STABILITY
The fundraising should ensure EA can better deal with loan issues, making the company financially healthier following its strong performance in the first nine months of last year, he said.
EA's electricity generation from solar energy business
The subscription period for the rights offering is Jan 17-23.
Funding from the rights offering is primarily intended for retiring loans from banks and redeeming maturing debentures.
EA hopes to reduce its debt from 58.6 billion baht to 52 billion, leading to savings of 300 million baht on annual interest payments and improving its debt-to-equity ratio, which benefits the company’s financial stability and creditworthiness, said chief financial officer Vasu Klomkliang.
“This helps us generate further savings through more favourable terms on our outstanding loans,” he said.
Mr. Vasu Klomkliang, Chief Financial Officer, Energy Absolute PCL
According to EA, its cashflow from January to September last year was strong at 5.6 billion baht, improving from -1.7 billion baht year-on-year and almost three times greater than 2023.
Earnings before interest, taxes, depreciation and amortisation tallied 6.1 million baht on revenue totalling 14.3 billion baht while net profit was 1.8 billion baht.
“We have profitable businesses in the production of biofuels, electricity generation from wind and solar energy, as well as the operation of the EV charging business that has a positive cashflow,” said Mr Chatrapon.
“These businesses contribute 60% of revenue and almost all of our profits.”
EV, BATTERY OBSTACLES
EA has adjusted its EV and battery manufacturing as part of the company’s business restructuring to further grow in the EV and battery sectors, especially through partnerships.
According to Mr Chatrapon, the company has faced challenges as its profitable businesses were offset by commercial EV and battery manufacturing which were losing money and draining the company, largely as a result of changes in the global environment that affected the dynamics of EV and battery businesses.
Mr. Chatrapon Sripratum, Chief Executive Officer, Energy Absolute PCL
“We had to pause the vehicle assembly business and scale down the battery business. These two decisive actions have successfully halted the drain on our cash,” he said.
EA then changed its business model, believing the commercial EV and battery businesses still have growth and profit potential.
The company needs to form a close partnership with a giant global player in these sectors that can help it be more competitive and also enable it to penetrate markets beyond Thailand.
The company must also commit less of its capital to such fast-changing sectors that offer very limited time to recoup investments.
“We have already made good progress in driving this strategy which will also make us more agile and more resilient in the face of future global changes,” said Mr Chatrapon.
EA is currently establishing a joint venture with one of China’s largest special vehicle manufacturers to produce and export electric special vehicles.
The joint venture partner, Chengli Special Automobile Co, produces more than 30,000 units of special vehicles and exports to 30 countries.
The two companies agreed the vehicles will be assembled at EA’s factory in Chachoengsao, with capacity of 3,000-9,000 units, depending on the complexity of the special vehicles being produced.
Typical electric vehicles to be assembled, scheduled to start production in April, include ambulances, garbage trucks and telescopic boom lifts, which will be the first time such EVs are assembled in Thailand on an industrial scale.
This collaboration is expected to generate in excess of 3 billion baht in annual revenue in the first full year of operation in 2026.
EA also signed a memorandum of understanding to establish a joint venture with one of China’s leading battery manufacturers which has important customers in the US and European markets.
The partnership is to produce lithium-ion batteries and will be the first large facility in Thailand to manufacture lithium-ion batteries.
The batteries are primarily for use in home energy storage systems, addressing both demand in Thailand as well as major overseas markets.
The battery production at EA’s factory in Chachoengsao involves scaling up from 2 gigawatt production capacity to 4GW.
The joint venture agreement is expected to be signed in February this year.