KNM's ethanol plant in Thailand
PETALING JAYA: KNM Group Bhd
has proposed to issue bonds in Thailand to raise up to US$80mil (RM330.2mil) equivalent in baht to finance its bio-ethanol business in that country.
In its filing with Bursa Malaysia, the process equipment manufacturer and energy group said the proposed Thai bonds had been assigned a credit rating of AAA/Stable by TRIS Rating Co Ltd by virtue of the debt papers being guaranteed by Asian Development Bank’s trust fund Credit Guarantee and Investment Facility.
“Proceeds from the proposed Thai bonds will be utilised by KNM to provide a foreign currency lending to IEL (Impress Ethanol Co Ltd), which will in turn use the proposed Thai bond proceeds for the purposes of financing future expansion and working capital expenses for its bio-ethanol plants,” the group said.
KNM has an indirect stake of 72% in IEL, which is currently constructing its phase one bio-ethanol plant, with a daily production capacity of 200,000 litres of ethanol.
Construction of Phase 2 of the bio-ethanol plant for an additional 200,000 litres of ethanol per day is expected to begin by the first half of 2017.
According to KNM, the proposed Thai bonds are expected to be fully issued by December 2016, with the estimated total costs at RM1.1mil to be realised in the fourth quarter of 2016.
“The interest payments shall be dependent on the final coupon rates to be fixed,” it said.
On completion of the proposed Thai bonds, KNM said, its total debts would increase to RM1.04bil from RM718.5mil as at end-December 2015, while its gearing ratio would rise to 0.38 from 0.27 previously.
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