Thai Petrochemical Industry Plc’s (TPI) largest creditor, Bangkok Bank Plc (BBL), said it has approved ’in principle’ TPI’s new debt restructuring plan. BBL chairman Chatri Sophonpanich, pictured right, said over the weekend, the plan covers US$2.9 billion in debts that TPI owes to various creditors. BBL currently has the largest share of these debts followed by German development bank KfW, the International Finance Corp, Bank of Ayudhya Plc, Citibank (Bangkok branch) and the US Export and Import Bank. "In principle, BBL as creditor agrees to the proposed debt restructuring," Chatri said.
He said BBL does not have any objections to TPI’s business rehabilitation plan that includes a capital decrease followed by capital raising, debt-to-equity conversion and bringing in strategic partners. "How far will TPI go in the future depends on who buys a strategic stake in it and what amount of shares they are willing to buy. As of now, there are no actual buyers for TPI," said Chatri. Previously, there were reports indicating that TPI was eyeing PTT Plc (PTT) and Siam Cement Plc (SCC) as potential partners. However, both companies have refused to comment on the matter.
Meanwhile, BBL senior vice-president Decha Tulanand said there are encouraging signs that TPI will soon pay its debt to the bank. He said BBL is already looking to who will manage TPI’s business once the new business rehabilitation plan is endorsed by the court. "As a creditor, BBL wants TPI to pay back all its debts. Indeed, we want a management team specialising in this industry to manage TPI," Chatri told reporters.
JP Morgan Securities said the debt restructuring plan is a net positive. Most importantly, its implementation would enable the bank to declassify 26 billion baht in loan exposure to TPI, thereby reducing its total problem classified loans by 12 percent and its probable classified loan ratio from 25 percent to 22 percent.