TPIPL to refinance B10bn in debt

TPIPL to refinance B10bn in debt
Published: 20 March 2007

TPI Polene, the country’s third largest cement producer, plans to refinance debt of 10.12 billion baht before exiting its rehabilitation plan later this year, according to senior vice-president Prasert Ittimakin.  
 
Mr Prasert said the company would refinance foreign-currency loans to local debt through a syndicated loan with four or five domestic banks.  
 
"After our refinancing plan has finished, the company will exit from the rehabilitation plan, and we hope we can make the first dividend payment to shareholders,’’ Mr Prasert told investors at a briefing at the Stock Exchange of Thailand yesterday.  
 
TPIPL’s debt breaks down into $120.52m in dollar-denominated debt, 43.94m in euro-denominated debt, 401.4 million in Japanese yen and 3.56 billion baht. Major secured creditors are Germany’s KfW at more than 40% of total debt, followed by Bangkok Bank and Krung Thai Bank. Deutsche Bank also is a large unsecured creditor of the company.  
 
Mr Prasert said the refinancing plan had been mostly approved by creditors, with two or three institutions still reviewing the details.  
 
``If the refinancing plan is successful, the company can reduce interest expenses, now at 8% per year,’’ he added.  
 
Once TPIPL’s restructuring is approved, the company plans to invest 1.2 billion baht in TPI Polene Power to construct a 36-megawatt plant. The company, which hopes to invest 600 million baht in the project this year, expects to reduce its annual power costs by 360 million to 510 million baht over the next two years. 
 
TPIPL this year also plans to invest in new machinery for a fourth cement plant under a $75-million project boosting the company’s capacity to 12 million tonnes per year from nine million now.  
 
The company reported 2006 net profits of 2.78 billion baht on revenues of 26.36 billion, up from profits of 1.52 billion on revenues of 15.67 billion the previous year. 
 
Mr Prasert said gross margins were expected to remain stable at 23% this year, with total revenues projected to rise by 5% this year from 2006. Exports are projected to account for 10% of total revenues, with local sales the rest.  
 
TPIPL also will book around 404 million baht this year in revenues from Thai Nitrate, a joint venture 50% held by the cement producer.  
 
Shares of TPIPL closed yesterday on the Stock Exchange of Thailand at 11.80 baht, down 10 satang, in trade worth 4.72 million baht.