Tris Rating downgrades the company rating on Energy Absolute Public Company Limited (SET: EA) to A- from A, with a stable outlook, while maintaining the ratings of A- on its senior unsecured debentures.
According to Tris Rating on Monday, the rating action reflects EA’s weakened financial profile, caused by the large amount of debt financing for its battery and electric vehicle (EV) businesses, as well as its ongoing investments to develop an ecosystem for its EV business.
The A- ratings continue to reflect EA’s robust cash flows from its power generation assets with long-term Power Purchase Agreements (PPAs) with the Electricity Generating Authority of Thailand (EGAT) and the Provincial Electricity Authority (PEA). The ratings also incorporate EAs competitive advantage in the EA business from its first-mover position and business integration in the supply chain for EV in Thailand.
At the same time, Tris Rating maintains the ratings on EA’s senior unsecured debentures at A-, equal to the company rating. At the end of December 2022, EA’s priority debt proportion declined to 47%, lower than the 50% threshold of notching down for subordination risk, according to TRIS Ratings methodology.
