Italian-Thai Development Allowed to Exit Rehabilitation Plan by Phairath Khampha 26 December 2002 Banks set to extend new credit The Central Bankruptcy Court on December 16, 2002 approved a petition by Italian-Thai Development to exit its business rehabilitation plan. Chatichai Chutima, an ITD vice-president, said the move would improve the company's credibility in bidding for various contracting projects, particularly in foreign countries. Several commercial banks were said to be close to approving new credit lines for the company pending the formal end of business rehabilitation. Under the restructuring plan approved by the court earlier in 2002, 12.85 billion baht in debt out of total liabilities of 20 billion baht would be covered through a debt buy-back at a discount and a partial swap of debt for new equity. Remaining debt consists of unsecured liabilities and debt held by bondholders. (1 US Dollar = 43.26 Thai Baht) The debt-to-equity swaps and repayments through new share issues had reduced debt to four billion baht. "Our profitability will increase from the approval. But that does not mean that we will see an immediate large improvement in terms of share price," Mr Chatichai said. Shares of ITD on the Stock Exchange of Thailand on December 16 closed at 23.50 baht, up 20 satang, in turnover worth 56.8 million baht. ITD currently is working on various contracts worth more than 40 billion baht, including the Suvarnabhumi Airport terminal, a dual-track rail line to Chachoengsao and the BTS Skytrain project. Mr Chatichai said the value of contracts in hand would rise to 60 billion baht if it won a bid for the Nam Theun 2 dam project in Laos. The company was also bidding for various construction projects in Taiwan, the Philippines, Burma, Indonesia, Laos, Vietnam, Cambodia and the Maldives, to help offset a slowdown in major construction projects in the local market. ITD's debt-to-equity ratio currently stood at 0.3 times following the debt restructuring, Mr Chatichai said. The company posted nine-month profits of 6.06 billion baht, compared with net losses of 2.3 billion baht in 2001. For the third quarter, ITD posted a net loss of 4.5 million baht compared with profits of 315.9 million in 2001. Operating profits for the first nine months of 2002 stood at around 600 million baht. Mr Chatichai said that ITD expected to post total operating profits of 800 million baht for the entire year.