UWC on the Day without Burden

Ua Withya Public Company Limited (UWC) in recent years has been looking for other business opportunities in order to fill up its portfolio as the company is facing a recession in core business revenue – transmission line towers and telecommunication towers. 

 

UWC in 2015 has penetrated electricity and alternative energy businesses by acquiring 3 Biomass Power Plants with total installed power generation capacity of 26.9 MW, comprised of 1) UWC Komen Biomass Company Limited (UKB), with an installed capacity of 9.9 MW at Nakorn Ratchasima 2) UWC Amphan Biomass Company Limited (UAB), with an installed capacity of 9.5 MW at Buriram and 3) Satuek Biomass Company Limited (SBM), with an installed capacity of 7.5 MW at Buriram. All 3 Biomass Power Plants have already commenced a COD.

 

However, the acquisition of 3 Biomass Power Plants prompted UWC to have a high amount of debt as much as 761 million baht.

 

The weaknesses of UWC are 1) UWC is lack of expertise in power plant especially biomass energy and 2) has high financing cost on the operation. Therefore, it turned out that UWC was unable to fully recognise a revenue and profit margin from those 3 plants.

 

Consequently, UWC decided to dispose all of 3 Biomass Power Plants to Absolute Clean Energy Public Company Limited (ACE) with the transfer of claims in relation to outstanding loans.  

 

Even though UWC might loss opportunities in this business field, but the divestment in the 3 Biomass Power Plants will improve in financial liquidity as UWC will have a cash flow approx. 400 – 500 million, enhancing opportunity to expand its core business of transmission line towers and telecommunication towers both domestic and overseas. 

 

Moreover, UWC won’t have to recognise the contingent risks associated with the biomass plants anymore. As well as the outstanding loans owed by those 3 plants totalling 761.31 million baht as it will transfer to ACE.

 

In addition, UWC will has adequate cash flow of 300 million baht to repay the secure bonds that will become mature in March 2021. 

 

After experiencing a net loss for several years, it might be time for UWC to finally make a turnaround to book a profit!