TPI restructuring moves forward as Prachai is out

01-Dec-05

to seek first rights to an upcoming share offering in Thai Petrochemical Industry, as the debt guarantor and debtor, had no first right to purchase the shares offered. The five-year, US$2.7-billion restructuring battle over TPI appears to have ended after the Supreme Court rejected a last effort by founder Prachai Leophairatana to regain control of the 21-year-old company. With this judgement, the administrators can move forward with plans to issue 17.55 billion new and existing shares to strategic investors, existing shareholders and creditors at 3.30 baht each. Under the restructuring plan, four state-related institutions - PTT Plc, the Government Pension Fund, the Vayupak Fund and the Government Savings Bank - will take a 61.5% total after the share offering, with energy conglomerate PTT holding 31.5% and management control. The rehabilitation plan would begin immediately, with the subscription for the rights offering to run till Dec 7. The funds raised from the share offering will be used to retire existing debt, with remaining debt to be restructured over a 10 to 12 year period. Another $250 million worth of debt will be cleared from the sale by TPI of its 49% shareholding in cement producer TPI Polene. The Supreme Court yesterday also rejected a petition by Mr Prachai to have first rights to the TPI Polene stake, citing that the current bid process was in line with the current rehabilitation plan. Two remaining legal petitions could still undermine the restructuring and share issue. The court will rule on Dec 9 on an emergency petition by Mr Prachai to halt the share offering, and has also scheduled a hearing on Dec 15 to announce its judgment on a petition to revise the share offering price.