Energy Earth plc

06/15/2017 | Press release | Distributed by Public on 06/14/2017 19:56

The Clarification of the Event of Default of Bills of Exchange

GM.0001/2560

15 June 2017

To Secretary General

The Securities and Exchange Commission, Thailand

CC President

The Stock Exchange of Thailand

Subject The Clarification of the Event of Default of Bills of Exchange

According to the SEC letter no. SEC.PS. 954/2560 dated 8 June 2017 requesting the Company to provide the clarification of the event of default of bills of exchange, the Company would like to clarify as follows;

  1. The reason of the event of default and the Company's inability to prevent the event of default in advance.

    Energy Earth Public Company Limited ("The Company") has been operating coal trading business in Thailand and oversea with the support from the local financial institutions for more than 10 years. The Company never had a record of delay payment or default payment on principal or interest.

    However, in late April 2017, one of the financial institutions has informed the Company to temporarily stop using credit facility and to reduce the outstanding balance to less than THB5,000 million with immediate effect.

    The Company has also prepared to issue new bond amounted to THB5,000 million to refinance the existing debts of THB3,500 million and to use the remaining proceeds for working capital purpose. But the issuance of the new bond was also stalled by the financial institution.

    In May 2017, the financial institution has ceased all of the credit facilities, even though the Company never defaulted on any payment or breached of contract. The Company has been unable to find alternative financing in time and has to face with extreme tight cash flow due to the Company has already repaid the bills of exchange amounted to THB4,122 million since January 2017.

    As a result, the Company has severe liquidity problem and is unable to repay bills of exchange.

  2. The effect of the event of default of the bill of exchange on other liabilities, i.e. the bond and the loans from financial institutions.

    The effect of the event of default can be summarized as follows;

  3. As at 14 June 2017, the Company has default payment with financial institution amounted to THB717,504,097.97, which constitutes an event of default of the bond that the Company has offered no.1/2558 with maturity in 2017 and no.1/2559 with maturity in 2019. The Company will inform the event of default of the bond to the Registrar soon.

  4. Other financial institutions have also reviewed the credit facilities and the Company has not been able to use such credit facilities. Moreover, the Company has not been able to issue new Bills of Exchange to refinance Bills of Exchange that have become due and payable.

  5. The Company's business creditability becomes low and the Company has to conduct future business on cash basis, which have caused the difficulty in managing cash flow.

    soon.

  6. The plan to solve liquidity problem and how to repay the overdue debts.

  7. The Company is in process to find a concrete plan to solve problem and will inform the SEC

    Please be informed accordingly.

    Sincerely Yours

    (Mr. Thanawat Pratoomsuwan) Managing Director