TPIPL seeks further delay for restructuring

TPIPL seeks further delay for restructuring
Published: 13 October 2005

TPI Polene Plc plans to petition the Central Bankruptcy Court this month seeking an extension of its debt-restructuring period by one year to December 2006, according to plan administrator Prachai Leophairatana. TPI Polene entered into the debt-restructuring plan in 2000. The plan is set to be finished by the end of 2005. Mr Prachai said the extension was to ensure a smooth operation in face of intense competition and price dumping in the cement industry. ’’The court is our last resort to protect us from the [impact of] price-cutting by our rivals,’’ he said.

Prasert Ittimekin, senior vice-president of TPI Polene, said that the extension of the plan had been allowed by the company’s creditors since the beginning of the restructuring process. Stiff competition in the local cement market, which has led to a decline of cement price by 150-200 baht per tonne now from last year, has adversely affected its performance.

TPI Polene yesterday reported that its operating profit over the first nine months of this year dropped by 45.89% to 1.37 billion baht from 2.5 billion baht in the same period of last year. For the third quarter of this year, earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 12.56% to 1.11 billion baht from 1.27 billion baht in the same period last year.

TPI Polene raised its capital by US$285m through a new share offering last year. The proceeds were used to buy back debts at a discount rate, reducing its debt burden by around $600m. The company’s executives said its healthy financial status, accumulated losses of 1.17 billion baht had been wiped off. Its retained earnings now stand at 2.5 billion baht. ’’We hope the company will be able to pay dividend from this year’s results,’’ said Mr Prachai.

TPI Polene’s outstanding debts were expected to decline to 24 billion baht by the end of this year from 26 billion baht.

Meanwhile, the plan administrator of Thai Petrochemical Industry Plc (TPI), the parent firm of TPI Polene, has planned to petition the court seeking a three-month extension of the rehabilitation plan. TPI was originally set to exit court-supervised rehabilitation at the end of the year but was put off by the delayed sale of TPI shares to a coalition of state-owned agencies _ energy conglomerate PTT Plc, the Government Savings Bank, the Government Pension Fund and the Vayupak Fund.

PTT would pay around 20 billion baht for a 31.5 per cent stake in TPI. Once the purchase is completed, the PTT-led coalition would hold a combined 61.5 per cent stake in the firm. The planner believes that the TPI share sale to PTT and the other state agencies would be delayed until February 2006, from the original schedule of Nov 4. Mr Prachai, however, said he would petition the court against the plan administrators’ earlier request for the right to call a shareholders’ meeting, paving the way for PTT to take seats in TPI board. The court has given Mr Prachai until Oct 25 to file the petition against the plan administrator’s request.