TRIS Affirms A+ Rating on BANPU to Reflect Its Leadership in Coal Industry-Stable Income

TRIS Rating affirms the company rating on Banpu Public Company Limited (BANPU) and the ratings on its outstanding senior unsecured debentures at A+. TRIS Rating also affirms the rating on BANPUs proposed issues of up to THB4 billion subordinated capital debentures (hybrid debentures) and the additional greenshoe portion of up to THB2 billion, announced on 27 February 2020, at A-. The rating outlook remains stable.

At the same time, TRIS Rating assigns the rating of A+ to BANPU’s proposed issue of up to THB7 billion and an additional greenshoe portion of up to THB3 billion in senior unsecured debentures. The proceeds from the new debentures will be used for refinancing its existing debts and for its working capital. 

The ratings continue to reflect the company’s leading position in the coal industry in the Asia-Pacific region, reliable stream of income from its power business, and strategic move to focus more on green energy. The ratings take into consideration coal price volatility and factor in the slowdown in demand for coal in the long term, driven in part by efforts to reduce emissions worldwide.

For the first three months of 2021, the company’s operating revenue was USD742 million, increasing by 12% year-on-year (y-o-y). The higher revenues were mainly due to a higher coal and natural gas price, together with a contribution from Barnett Shales assets acquired in the fourth quarter of 2020. BANPUs earnings before interest, taxes, depreciation, and amortization (EBITDA) also increased by 23% y-o-y to USD266 million for the first three months of 2021. The company’s debt to EBITDA ratio was 7.6 times for the first three months of 2021 and improved from 8.6 times in 2020.