Creditors of Thai Petrochemical Industry Plc (TPI) have decided to acquire the 249-million share block of cement producer TPI Polene Plc for 41.20 baht per share after receiving a much lower bid at an auction last month. Under TPI’s US$2.7bn debt restructuring plan, the 30.8 per cent stake was to be auctioned with proceeds to go to creditors in exchange for a US$250m writeoff against TPI’s total debt. Creditors had the first right to accept the shares outright against the writeoff if the auction results were not satisfactory.
While the effective share price is a hefty premium against TPIPL’s market price, creditors are essentially assuming that the value of the cement producer, the country’s third largest after Siam Cement and Siam City Cement, will rise in the future and is a more profitable choice than the 17-baht-per-share bid received at last month’s auction. TPI Polene’s stake will be allocated to the creditors based on their TPI debt holdings, according to a TPI plan administrator. The transaction will take effect within 10 days.
Prachai Leophairatana, the TPI founder and TPI Polene’s plan administrator, said that although TPI’s creditors would become TPI Polene shareholders in this deal, he would retain management control of the company based on his appointment by the court as the plan administrator. ’’No problem. TPI Polene’s shares will be allotted to more than one hundred creditors so they will be just minority shareholders. There is nothing to worry about,’’ he said. However, Mr Prachai said earlier that he planned to seek approval from the court for the extension of TPI Polene’s debt-restructuring period for one year to December 2006.
