EA Shareholders Approve Capital Increase to Repay Debt and Drive Recovery

Shareholders of Energy Absolute Public Company Limited (EA) have approved a 7.4 billion baht capital increase, with the funds earmarked for debt repayment and business recovery. 

The move follows a period of corporate restructuring, including the resignation of CEO Sompoch Ahunai and Deputy CEO Amorn Sapthaveekul.

The Securities and Exchange Commission (SEC) previously filed charges against three EA directors and executives with the Department of Special Investigation (DSI) for alleged collusion in procurement fraud, amounting to over 3.4 billion baht in damages.

On Tuesday (January 7th), shareholders approved a Right Offering (RO) of 4.95 billion shares, with accompanying warrants ("EA-W1"), at a subscription price of 4.00 baht per share.

EA CFO Vasu Klomkliang stated that the primary use of the capital increase will be to repay bank loans and redeem maturing bonds. The company aims to reduce its debt from 58.664 billion baht to 52.004 billion baht, resulting in an estimated ฿300 million reduction in interest expenses.

CEO Chatrapon Sripratum emphasised that the capital increase will strengthen EA's financial position and facilitate the restructuring of loss-making businesses. 

He highlighted two key strategic partnerships:

• Joint venture with Chengli Special Automobile Co., Ltd.: EA will assemble special vehicles, including ambulances, waste trucks, and aerial work platforms, at its Chachoengsao plant. Production is expected to commence in April 2025, with an anticipated revenue of over 3 billion baht in the first full year of operation.

• Joint venture with a Chinese battery manufacturer: This partnership will establish Thailand's largest lithium-ion battery factory at EA's Chachoengsao site, focusing on production for the US and European markets. The joint venture agreement is expected to be signed in February 2025.

For the nine-month period of 2024, EA reported a net profit of 1.852 billion baht, EBITDA of 6.183 billion baht, and cash flow of 5.610 billion baht, a significant improvement compared to the corresponding period in 2023.