TRANSPORT / DEBT RESTRUCTURING

BMCL seeking lower rates

NUNTAWUN POLKUAMDEE

Subway operator Bangkok Metro Plc will negotiate with its creditors to reduce interest rates on its 10 billion baht in debt.

Managing director Sombat Kitjalaksana said the company would seek an interest rate reduction to minimum lending rates from MLR+0.25% now.

BMCL hoped to finalise the issue by June, he said. The company's major creditors include Krung Thai Bank, TMB Bank, Bank of Ayudhya and Siam City Bank.

The company also wants to maintain its principal payments this year at 110 million baht, instead of the 330 million due to creditors under the existing loan contracts.

Mr Sombat, speaking at BMCL's shareholders' meeting yesterday, said every one percentage-point reduction in interest rates would help reduce costs by 100 million baht per year.

He said the company expected to break even on operations by 2010, when daily ridership is expected to reach 300,000 compared with 200,000 now.

BMCL reported revenues of 1.39 billion baht for 2006, up from 33.74% a year earlier. The company booked a net loss of 1.67 billion baht for last year, down from losses of 1.71 billion the previous year.

Eighty-eight percent of the company's revenues were from subway fares, with the remainder from commercial leases for retail shops in subway stations.

Rider revenues last year rose 24.14% from higher traffic and increased fares in August. Under the concession contract, BMCL has the right to revise train fares every two years based on the Bangkok non-food consumer price index.

Commercial revenues last year increased 172%, or 91.71 million baht from the previous year due to stronger returns from shop leases and ad revenues.

Mr Sombat said BMCL would delay plans to procure five new trains until 2008 due to the weak economy. The company will open bidding for a new mass-transit project later this year.

Shares of BMCL closed yesterday on the SET at 1.04 baht, unchanged, in trade worth 1.27 million baht.

Bangkok Post

Last Updated : Tuesday April 10, 2007