Issuing debentures might be one of the easiest methods to raise funds for companies, but as geopolitical and economic concerns from global trade war are at their highest, there is growing unease in the market that several corporates may be unable to meet their obligation at the due date.
Based on the data from Thai Bond Market Association, there are 81 debentures maturing between May and June 2025.
Concerns have emerged regarding the redemption capabilities of Eastern Water Resources Development and Management (SET: EASTW), specifically the EASTW256A series with a redemption date of June 16, 2025, and valued at 1.2 billion baht.
One particular issue that flags investors is its financial position. Based on EASTW’s financial statements at Q4 2024, the company recorded net cash from operations at 1,109 million baht, against negative net cash from investment activities at 1,400 million baht, and financing activities contracted 90.86 million baht, netting a cash flow deficit of 382.33 million baht. Furthermore, the Balance Sheet indicates a significant drop in cash and cash equivalents to 261.98 million baht by December 31, 2024, down from 644.31 million baht at the end of 2023.
This financial strain raises concerns over EASTW’s ability to generate sufficient cash flow in Q1 and Q2 2025 for bond redemption, potentially leading to a difficult situation and at risk of default. From this year until 2034, EASTW will be facing multiple bond obligations, totaling 9.25 billion baht:
| Debenture Series | Due Date | Value |
|---|---|---|
| EASTW256A | June 16, 2025 | 1.2 billion baht |
| EASTW25DA | December 23, 2025 | 350 million baht |
| EASTW275A | May 31, 2027 | 850 million baht |
| EASTW278A | August 6, 2027 | 200 million baht |
| EASTW280A | October 12, 2028 | 650 million baht |
| EASTW298A | August 6, 2029 | 400 million baht |
| EASTW300A | October 12, 2030 | 1.1 billion baht |
| EASTW318A | August 6, 2031 | 100 million baht |
| EASTW325A | May 31, 2032 | 750 million baht |
| EASTW332A | February 23, 2033 | 1 billion baht |
| EASTW334A | April 25, 2033 | 200 million baht |
| EASTW33OA | October 12, 2033 | 1.15 billion baht |
| EASTW348A | August 6, 2034 | 1.3 billion baht |
EASTW’s revenue-generating capacity has declined significantly due to expired water concessions. However, the strategy for securing funds to settle debt remains under scrutiny, and it is yet unclear if EASTW will default on EASTW256A, potentially triggering cross-defaults on other bonds.
