They will still sell, just no need to disclose. Surprise they cannot find buyer to buy in block. Sell like this every day is costly. Mean no fund interested to buy? They must pay higher dividend to attract mutual funds.
"In addition, the state-owned electricity company, Electricite du Lao (EDL), appears to be coming under increasing financial pressure due a rapid increase in debt-financed investment and near-term cash flow issues resulting from a drought over the past year which weighed on electricity production. Outstanding debt of EDL is about USD5 billion (26% of GDP), as advised by the authorities, much of which consists of on-lending from the government. EDL poses contingent liability risk for the government if EDL is unable to meet its external debt service obligations."
EDL is the guy working with MFCB and paying MFCB for the electricity. If Laos can no longer buy from MFCB (and this is assuming no doubtful debts), can MFCB sell to other countries like vietnam etc fast enough? is the transmission lines for those built up d?
@Choivo capital, I also likes MFCB very much. Please refer an old article to debunk your fear... https://www.theedgemarkets.com/article/mega-firsts-laos-turbine-likely-be-installed-march Below is an extract of a paragraph from the above article dated around Jan. 2019. "EDL will pay Don Sahong according to the energy availability and the payments are guaranteed by the Laos’ finance ministry." In my opinion, any financial problem of EDL shall NOT affect MFCB as payments are guaranteed.
But here's the problem. The transmission lines now are connected only to EDL (unless im mistaken) and not to other providers as well. Which means that for now, only EDL can buy, no one else can buy from MFCB, for now.
Secondly, payments are in USD not Laotian Kip, if EDL no money, means no money, where to find USD?
Third, EDL already owes outside USD5bil.
I would keep track on the receivables if i were you.
Unless ofc, the transmission lines can sell to Cambodia directly, and the amounts paid by Cambodia goes direct to MFCB pocket.
I think there is nothing to worry about, if you read the Fitch commentary fully.. it also states:
" A recently announced joint venture between EDL and China Southern Power Grid Co., Ltd (A+/Stable) should boost investment in the electrical transmission network, which has increasingly become a bottleneck for increasing electricity exports."
Out of 260 mw, 195 mw is sold to Cambodia ,balance is sold to Laos . There was a seperate line connected to combodia。EDL is like TNB.of malaysia. So far I have not heard TNB do not pay their IPP s even when.TNB were in the red . IF EDL do not pay, mfcb can just shut off the transmission. EDL cant give the stupid.excuse of no money when they collect money from their consumers and make a profit out of it .
@Choivo Capital, I think you missed the wording will 'pay on energy availability', which means no matter can or cannot sell, needs to pay and guaranteed by the Laos' Finance Ministry. MFCB gapped up on open trading, assume non-issue..Happy Trading.
I think Choivo got a point. We need to monitor the receivables, which is more than RM 200m in quarter ended 30 June 2020. It is higher than the quarterly sales, means more than 3 months turnover days. I don't know the whether it is normal or not. Any one has idea on payment term?
@Henry8833, Extract from MFCB Q2(June) 2020 report for your information. "Receivables of 215,938,000 - Increase mainly due to increase in trade receivable from EDL on higher energy sales. The average receivable turnover of EDL is 3-4 months." Sometime increase in Receivable is good as it show expansion of business. Happy Trading
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gemfinder
6,880 posts
Posted by gemfinder > 2020-10-07 22:11 |
Post removed.Why?