Creditors to swap $250m debt for TPIPL stake

Thai Petrochemical Industry Plc (TPI) creditors will acquire 30.8 per cent of TPI Polene Plc in exchange for US$250 million (Bt10.3 billion) in debts, after an auction was cancelled yesterday due to a lack of bidders. The stake in TPI Polene - 249 million shares - will be acquired for $1 per share.

Under TPI’s debt-restructuring plan, the court-appointed administrator was empowered to transfer the 30.8-per-cent stake to creditors if it could not be sold to another party by the third quarter. The creditors include Bangkok Bank and CityBank.

The auction scheduled for yesterday was cancelled after nobody submitted a bid, despite expressions of interest earlier in the year. A source close to the deal said bidders might have been deterred by the prospect of conflict with TPI founder Prachai Leophairatana.

Prachai had reportedly been in negotiations with Mexico-based cement firm Cemex to sell a major stake in TPI Polene, but the deal fell through due to conflicts about the management rights of the company, the source said. The debt administrator had hoped to sell the TPI Polene shares at Bt40 per share, higher than the market price of about Bt30 per share, the source said. The transfer will mark the payment of debts worth $250 million, out of $2.7 billion that TPI owes its creditors. However, the auction cancellation should not affect TPI’s overall debt-restructuring plan.