The acquisition will increase PTT’s leverage, but its rising debt-servicing capacity without impacting the rating remains high, supported by government support.
The acquisition will increase PTT’s leverage, but its rising debt-servicing capacity without impacting the rating remains high, supported by government support.
Fitch Ratings (Thailand) Co., Ltd. released a special report “Spotlight: PTT Public Company Limited” that the acquisition of The Company has a large acquisition in the downstream business and upstream business of PTT Public Company Limited (PTT (rated at ‘BBB+(tha)’). The outlook is Stable. ) will increase the company’s debt ratio in 2021 and reduce its increased leverage without affecting the Standalone Credit Profile’s rating headroom. PTT
However, PTT’s Standalone Credit Profile remains at ‘bbb+’ and its Long-Term Rating Headroom at ‘BBB+(tha)’ remains high due to strong government support.
Acquisitions Strengthen PTT’s Comprehensive Oil and Gas Business Acquisitions by PTT’s Subsidiaries in Petrochemical and Power Businesses It will increase the distribution of business operations in different regions. and greater geographic and business diversification, while acquisitions in the petroleum exploration and production business over the past few years have helped to increase the size of the business. and the distribution of the Company’s production resources and petroleum reserves
Fitch expects PTT to remain a strong leader in the natural gas business in Thailand. Despite the challenges from the increasing competition in the import of Liquefied Natural Gas, PTT has long-term liquefied natural gas purchase agreements with foreign producers. and has a history of importing liquefied natural gas, including the fact that PTT is the sole operator in the natural gas pipeline transportation business in the country should make the company have a competitive advantage
PTT’s credit rating It will remain the same as Thailand’s ratings (‘BBB+’ Stable Outlook) if PTT’s Standalone Credit Profile is no more than 3 ratings below Thailand’s rating based on the corporate credit rating guidelines related to the sector. state Fitch’s Government-Related Entities Rating Criteria: PTT is likely to receive high government support because PTT It is of strategic importance and a key engine in the natural gas business. and energy security in Thailand
PTT’s credit rating We have taken into account the risks of energy transitions over the next 3-5 years. has considered the impact of such changes to the current demand and price of energy Including the company’s investment plans over the next 3-5 years, Fitch views that PTT’s plans to prepare for future energy consumption changes should be positive for the company in the near term. Long term, PTT will continue to focus on businesses that still have strong demand during the energy transition period and will gradually invest cautiously in new energy businesses.
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