PTT to delay plan to merge subsidiaries IRPC Plc, PTT Aromatics and Refinery Plc

11-Jun-10

Ongoing worries about legal issues as well as a not so robust business outlook under current feeble markets, has compelled PTT Plc to mull a decision about merger of its two subsidiaries. PTT has plans to delay merger of IRPC Plc and PTT Aromatics and Refinery Plc (PTTAR) from end of 2010, until early 2011. IRPC is the largest integrated petrochemical complex in Southeast Asia, while the PTTAR is the region's largest paraxylene producer. The legal concerns relate to competition law, and to pending lawsuits lodged by Prachai Leophairatana, the founder of Thai Petrochemical Industry. Thai Petrochemical Industry was taken over in debt restructuring from Leophairatana by PTT and renamed IRPC. The Thai company’s board is keen on conducting further studies, especially related legal cases the companies have faced, and also the Constitution to ensure no problems occur if two combine. The new study is also expected to take a more in-depth weigh the pros and cons of a merger versus keeping the companies as individual entities, the global petrochemical business outlook and the companies' future performance. This task is being assigned to a consulting company and is to be completed by Q4-10, after which approval will be sought from the boards of all three companies.