TPI Polene receives one-year extension

General news - Thursday December 13, 2007

TPI Polene receives one-year extension

Debt-restructuring to end next year

BUSRIN TREERAPONGPICHIT

The Central Bankruptcy Court has approved a request by TPI Polene, the country's third largest cement maker, to extend its debt restructuring plan for one year to the end of 2008.

The company's director and debt planner, Prachai Leophairatana, said that all relevant parties had agreed with the extension since the company had not yet finished restructuring under the court-supervised plan.

''I am confident that we can make it within one year,'' he said yesterday.

The company entered rehabilitation in 2000, the same time as Thai Petrochemical Industry Plc, since renamed IRPC Plc and taken over from the Leophairatana family by PTT Plc and other state-linked investors.

TPIPL said it had hoped to obtain loans from local banks and financial institutions, but the deals could not be closed.

The Criminal Court recently sentenced Mr Prachai to three years in jail and fined TPIPL 6.9 billion baht for violating securities laws related to TPIPL's public offering of 11.1 billion baht worth of shares in January 2004.

With the huge fine, TPIPL would have difficulty finding new funding to refinance its obligations.

The case involved statements made by Mr Prachai and TPIPL regarding the company's stock prospects before a public offering in 2004.

Under the Bankruptcy Act, a company is allowed to complete its court-supervised business rehabilitation in five years. However, the Act allows additional extensions if needed.

Under the plan, TPIPL still needs to refinance debts totalling 8.4 billion baht before exiting court-supervised rehabilitation. The company was scheduled to exit restructuring at the end of this month.

Surachai Pramualchareonkit, an analyst with Kim Eng Securities, commented that despite the large fines and the delay in refinancing, the company's financial status was stable.

Considering its earnings before interest, tax, depreciation and amortisation of between four billion and five billion baht a year, he said, the company was in a position to service long-term debt of 8.4 billion baht, and could also manage the 6.9-billion-baht fine if need be.

Although the cement business is expected to remain poor until next year, a 10% price rise would help ease the burden of rising costs.

TPIPL shares closed yesterday on the Stock Exchange of Thailand at 8.30 baht, up 35 satang.

Bangkok Post