Ruling on Italian-Thai's Debt Plan Postponed - Planner Seeks Time to Clarify More Details by Phairath Khampha 28 February 2002 The Central Bankruptcy Court on February 11, 2002 postponed a ruling on the 12.85-billion-baht (1 US Dollar = 43.93 Thai Baht) debt-restructuring plan of Italian-Thai Development Plc at the request of the company's planner, which had sought at least one month to improve the plan. The planner wanted to review the arrangement for the sake of creating more transparency and greater understanding among all creditors, said Chatichai Chutima, an Italian-Thai vice-president. It was the second postponement of a ruling by the bankruptcy court. On January 24 it had agreed to the request of a group of 11 smaller creditors, representing two billion baht in debts, who had sought more time to study details of the plan. The country's largest construction company debts totalled 18.82 billion baht, but the plan covered only 12.85 billion baht owed to unsecured financial creditors and bondholders. Siam Commercial Bank was the largest single creditor, with 53% of the total debt covered by the plan. The revision was expected to take at least one month if the plan's principal concept remained unchanged, said Mr Chatichai. "The plan revision should not take much longer. The longer the process takes, the more the creditors are subject to losses," he said. A creditors' meeting could be called shortly to discuss any points in the plan that were unclear or needed improvement, he said. The dissident creditors complained that the plan appeared to favour Siam Commercial Bank to the detriment of smaller creditors. Sukit Udomsirikul, a strategist with Capital Nomura Securities, said the fact that the planner had sought the delay could signal a definite need for clarification, particularly to small creditors. The process could have become more complicated or gone back to square one if Italian-Thai had gone ahead and sought a final court ruling and the verdict turned out in favour of dissident creditors, he said. Mr Chatichai said the delay in the ruling was unlikely to affect the company's operations which were now directed at going ahead with the work on the new international airport at Nong Ngu Hao and the resumption of design-construction activities for the NamTheun 2 hydropower project in Laos. However, he said it could delay the company's realisation of gains, estimated at six billion baht, from debt restructuring to the third quarter from the second quarter as projected. Italian-Thai had earlier projected that a sharp reduction in interest costs coupled with steady growth in construction contracts in hand would bring an operating profit of 500 million baht this year, compared with an estimated net loss of two billion baht on revenues of 13 billion for 2001. Mr Sukit said the delay was also unlikely to affect the company's cash-flow significantly, since Siam Commercial Bank had made a commitment to provide full financial support to Italian-Thai. The proposed restructuring would involve a debt-to-equity conversion, capital raising and an extension of the debt repayment period. Creditors representing 80% of the debt due for restructuring approved the plan in December.