Thailand: Second attempt planned to auction shares of cement affiliate

After a failed electronic auction of the shares of its cement and petrochemical subsidiary last month, Thai Petrochemical Industry (TPI) has decided to reopen the bid in a fresh attempt to raise US$249m to repay TPI’s debts.

Siri Jirapongphan, a member of the TPI rehabilitation planning team, said sealed bids for the shares of TPI Polene (TPIPL) would be solicited and were scheduled to be opened on September 22.

Twenty-nine interested bidders have been invited to join the new auction. The creditors will be allowed to participate as well if they choose.

To attract more bidders, the planner relaxed its deposit requirement, which is now set at 100m baht. In the previous auction, each bidder was required to submit a standby letter of credit of one billion baht. The planner said the possible removal from TPIPL’s board of founder Prachai Leophairatana by a recent court decision was among the factors prompting it to relaunch the bid.

The previous electronic auction of TPIPL shares, scheduled on August 9, was scrapped because it attracted no bidders. Among the perceived causes was uncertainty about the future response from Mr Prachai, who is also TPIPL’s plan administrator.

Mr Prachai is currently being forced to leave the boards of three listed companies by the Securities Exchange Commission (SEC) after having been charged with misleading the public on TPIPL’s share prices back in August 2004.

A source close to the deal said that because more than two-thirds of the creditors had to approve the second share auction, the planner had asked the creditors to vote on the issue by Sept 15.

Regardless of the final price of the auction, TPI’s creditors still need to write off US$249m of TPI’s debt.The TPIPL share sale is a key requirement under the US$2.7bn TPI debt-restructuring plan approved by the court last November. The share sale is aimed at raising US$249m for debt repayment to TPI creditors.

Under the plan, TPI would acquire at least US$250m from selling off TPIPL shares. However, the creditors are still allowed to decide whether the shares should be sold.TPIPL shares closed yesterday on the SET at 29.50 baht, up one baht, in trade worth 167.6m baht while TPI shares closed at 14.60 baht, up 30 satang, in trade worth 1.30bn baht.