Energy Earth forges deal with creditors

Financially beleaguered Energy Earth Plc has come to terms with its main creditors on a debt resolution under the company’s business rehabilitation plan, potentially letting Energy Earth continue its business operations.

“The company is willing to let financial institution creditors select a company to manage [Energy Earth’s] business rehabilitation plan, [filed with] the Central Bankruptcy Court as deemed appropriate by the creditors,” Energy Earth director Khajohnpong Khamdee said in a release.

“This will normalise the company’s operations and maintain its business value. Company executives will cooperate and manage the business under the rehabilitation plan.”

Mr Khajohnpong said the company’s coal business still has further growth potential and its business operations are expected to proceed, with help from financial institutions.

SET-listed Energy Earth also wants to push subsidiary Guangdong Energy Earth Co Ltd to list on Hong Kong’s stock exchange as planned, he said.

Krungthai Bank (KTB) president Payong Srivanich said earlier that Energy Earth’s creditors had not decided whether they would vote in favour of the business rehabilitation plan proposed by the cash-strapped coal trader.

KTB, Energy Earth’s biggest creditor, had said it would wait for additional information from the first court hearing slated for Sept 18 before making a decision.

Meanwhile, Energy Earth has asked the Securities and Exchange Commission (SEC) to extend the deadline to submit a special audit report, as the company’s auditor is finalising report preparations.

“The company would like to inform that the company has appointed PricewaterhouseCoopers ABAS Ltd to conduct a special audit [on] the source of debt, and the company is prepared to submit the report [by] Sept 12, 2017, which will exceed the 30-day deadline [set by SEC], due to [how] the auditor is in [the final process of ] report preparation,” Energy Earth said in a filing with the Stock Exchange of Thailand. “The company will request the SEC extend the submission date.”

Energy Earth had submitted a rehabilitation petition through the Central Bankruptcy Court on July 24 because the company had liabilities in excess of assets totalling 26 billion baht, a result of prosecution by suppliers.

On Aug 9, the SEC ordered Energy Earth to arrange a special audit report regarding the source, existence and status of additional debt, as the amount of increased debt had reached 1.21 times the company’s financial position.

The report should be submitted within 30 days, according to the SEC.

Energy Earth has total assets of 31.8 billion baht and total liabilities of 47.5 billion baht, according to the company’s revised statement submitted to the SET and released on Aug 1.

Of the company’s total debt of 21.5 billion baht, 11 billion baht is owed to financial institutions, 5.5 billion stems from bond issuance, 2.4 billion is from bills of exchange, 938 million is from trade accounts payable and other payables, 1.2 billion comes from short-term loans from subsidiaries, and 408 million is attributed to other liabilities.

Energy Earth also has 26 billion baht in contingent liability provisions.