TPI gets 6 month rehab extension from creditors

31-Oct-05

Creditors of Thai Petrochemical Industry Plc (TPI), Thailand's largest debt defaulter, have approved a proposal by TPI's administrator to extend its rehabilitation under the bankruptcy court's protection by 6 months, to the end of June 2006. 90.3% of TPI's creditors, holding debt worth Bt67.6 billion, supported the proposal. This request has come from the administrator to ensure a smooth transfer of management under new owners. A November 4 payment deadline for a group of government-related investors expected to take over TPI will not apply if the court approves the extension. State-owned oil and gas conglomerate PTT Plc and its partners - the Government Savings Bank, Government Pension Fund, and state-run Vayupak Fund I - have signed a MOU to buy a combined 61.5% stake in TPI. Underwriters of the pact have agreed to buy another 18.5% of TPI on behalf of creditors and another 10% on behalf of existing minority shareholders. TPI's founder, Prachai Leopairatana, was in tandem with the decision to extend the debt-restructure plan, but for entirely different reasons. The extension will give him time to negotiate with an investor interested in buying a major stake in TPI, for US$2.6 billion (Bt106 billion).