Stock/Finance Friday September 21, 2012 19:42
On 20 September 2012, BANPU informed the Stock Exchange of Thailand (SET) that the Civil Court has ordered BANPU and its subsidiaries to pay compensation to the Plaintiffs, Mr. Siva Nganthavee and his associated companies, for damages arising from the misuse of information regarding the lignite fired power plant project in Hongsa, Lao PDR. According to the Civil Court order, the compensation comprises compensation for misuse of information worth Bt4,000 million, with 7.5% interest per annum accruing from the date of the complaint. The compensation ordered by the court also includes compensation for the opportunity loss amounting to Bt860 million per year for 2015-2027 and Bt1,380 million per year for 2028-2039. If BANPU has to pay the compensation as per court’s order, the total payment is estimated to be about Bt33,000 million.
BANPU disagrees with the verdict and plans to lodge an appeal at the Court of Appeals. As the final verdict may have to go through higher court, the Appeal Court and possibly the Supreme Court, BANPU is not expected to be liable for any payment in the near term. TRIS expects the verdict of Civil Court will have no immediate impact on BANPU’s creditworthiness as the legal process may continue for quite some times. However, BANPU may be required to set aside provisions for this contingent liability. TRIS Rating will closely monitor the progress of the case and its implications to BANPU’s debt serviceability and financial profile.
BANPU is one of the major energy companies in Asia. It was established in 1983 to mine coal in Thailand. The company has continuously expanded and now has coal operations in Indonesia, China, and Australia. The firm simultaneously increased its investments in the power business in both Thailand and China.