Energy Absolute stocks crash after trade suspension lifted
Clean energy company’s shares slide amid ongoing fraud allegations and concerns over its ability to handle its 19.5 billion baht debt
Shares of clean energy firm Energy Absolute (EA) plunged after the Stock Exchange of Thailand (SET) lifted its trading suspension orders on Tuesday.
The stock closed at a dismal 9.15 baht per share on Tuesday, marking a 30.15% drop compared to Monday’s closing. The SET advised investors to review EA’s clarifications thoroughly before trading in the company’s shares.
“The SET index faces volatility due to uncertainty over the accusations against EA,” said Wilasinee Bunmasungsong, a senior director of research at Globlex Securities.
She was referring to the ongoing investigation into the company’s alleged procurement fraud worth approximately 3.5 billion baht, which resulted in its removal from the Thai stock market’s ESG (environment, social and governance) rating.
Adding fuel to the fire was EA’s perceived lack of clarity regarding its debt situation, she said.
The SET had suspended trading in EA stocks over concerns about the company’s ability to manage its financial obligations, particularly loans and debentures that will be due this year.
The SET asked for clear guidelines from the company on how its debts will be repaid, including the impact on the company’s business operations after the resignation of chief executive officer Somphot Ahunai and chief financial officer Amorn Sapthaweekul in response to the Securities and Exchange Commission (SEC)’s accusation procurement fraud.
The SEC filed cases with the Department of Special Investigation and the Anti-Money Laundering Office after finding evidence of fraud in equipment procurement for solar power plants in Nakhon Sawan and Lampang.
According to EA’s letter to the SET on Monday, its principal debt due within this year comes to 19.50 billion baht.
This includes 8.35 billion baht for short-term loans from financial institutions and short-term bills of exchange, 5.65 billion baht for long-term loans from financial institutions, and 5.49 billion baht for debentures, the letter said.
The company added that it intends to roll over short-term loans and plans to repay long-term loans and debentures with cash flow from the first quarter operations, loans from financial institutions and additional debentures.
As for the Thai Rating and Information Services (TRIS) move to downgrade EA’s rating from BBB+ (negative) to BB+ (negative), the company said this would not affect financial institutions’ confidence in issuing loans and debentures.
“The company still earns about 1 billion baht per month from power plants, which is the main source of cash flow,” EA said. “The company is also negotiating and considering the selection of strategic partner[s] to invest in building financial strength, increasing debt repayment potential, and developing a sustainable business in the long term.”
EA also said that the resignation of the CEO and CFO does not significantly affect its business operations and policies, saying it has appointed Somchainuk Engtrakul as acting CEO to build confidence among stakeholders and determine strategies to navigate through the crisis.
“Vasu Klomkliang, as acting CFO, is an expert in finance and investment, a former commercial bank executive, and has extensive experience with the company’s business,” the company added.
