Sale of TPI shares await court approval

Sale of TPI shares await court approval
Published: 26 July 2005

The planned e-auction of TPI Polene Plc’s 250 million shares may be derailed if the court approves Prachai Leophairatana’s latest attempt to regain control over the country’s third largest cement maker, the Bangkok Post reports.  Mr Prachai, who is TPI Polene’s rehabilitation plan administrator as well as the founder of parent Thai Petrochemical Industry Plc, filed a petition to the Central Bankruptcy Court last week asking for permission to buy 249 million shares of TPI Polene or around 31 per cent of the total shares currently held by TPI, at a price of US$1 (41 baht) each. Payment would be in the form of a swap with shares of TPI Polene’s low-density polyethylene (LDPE) manufacturing plant instead of a cash payment.

TPI’s Finance Ministry-appointed plan administrator is set to hold an electronic auction for the 249 million shares of TPI Polene on Aug 9. So far, at least five investors, both local and overseas, have expressed interest in participating in the bid.  The auction is a part of TPI’s US$2.7-billion debt restructuring plan approved by the court last November.

Under the plan, TPI will acquire at least $250 million from selling off the TPI Polene shares. If the offered price fails to meet the target value, creditors would be allowed to decide whether the shares should be sold.  For almost two years, Mr Prachai says he has attempted several times to negotiate with TPI’s plan administrators a proposal that would involve swapping the LDPE plant for TPI Polene shares held by TPI.

If he were to successfully negotiate this deal, Mr Prachai would regain control of TPI Polene with around 53 per cent of the shares. Mr Prachai and his family currently hold around 22 per cent of the cement firm.

Siri Jirapongphan, a member of TPI’s planning team, said the planner opposed Mr. Prachai’s proposal. "If Prachai wants to buy TPI Polene shares, he should participate in the auction we are conducting on Aug 9 under the court-approved TPI debt restructuring plan," Mr. Siri said.

He said, however, that the plan administrator was willing to consider purchasing the LDPE plant from TPI Polene at its proper value but not through Mr. Prachai’s proposed swap option. Another source on the TPI planning team said, "We (TPI) want $250 million in cash and not in terms of LDPE shares."