Thailand’s third-largest cement maker, said on Tuesday lower costs would drive a return to profit in 2009, but a debt refinancing was on hold while it talks to creditors.
The company, which won approval from the Central Bankruptcy Court on Monday to leave a debt rehabilitation programme, was seeking more favourable loan rates from its creditors, director and founder Prachai Leophairatana told Reuters.
"We will delay a debt refinancing programme because the market is not favourable. We will aim to negotiate with the banks for lower lending rates, which should be done in the first quarter," he said.
TPI Polene is seeking to refinance 6.2 billion baht ($178 million) in debt left over from when the company ran into trouble due to the 1997-98 Asian financial crisis.
Prachai, whose family controls 55 percent of the firm, said he planned to negotiate with its key creditors Bangkok Bank , BankThai and Deutsche Bank .
He said he aimed to halve the company’s debt financing costs to around 4 percent, which would help TPI Polene return to profit in 2009.
"With lower financial costs and falling energy prices, we should return to a net profit this year," he said, pointing to lower prices for coal used in cement production.
TPI Polene was expected to report a big loss for 2008 due to a THB6.9bn provision for a hefty fine imposed by a Thai court in December 2007.
The company is appealing the conviction for stock price manipulation.
On the market outlook for 2009, Prachai said he expected domestic cement consumption to hold at last year’s 30Mt due to increasing government spending on infrastructure projects to revive a struggling economy.