PUBLISHED : 14 Mar 2024 at 11:24
A money crunch at Thailand’s largest building firm is fuelling concern amongst buyers, regulators and ranking companies already unnerved by a sequence of native company scandals and debt defaults.
Italian-Thai Improvement Plc (ITD) confirmed on Wednesday studies that it’s in talks with banks for brand new loans to tide over the liquidity disaster that led to delayed funds to some staff and contractors. Buying and selling of ITD shares, which had whole liabilities of 108 billion baht together with bonds, loans and commerce credit score as of Sept 30, was suspended this month after the contractor missed the deadline for submitting its full-year 2023 monetary assertion.
The contractor posted a cumulative lack of about 6 billion baht from 2020 to 2022 because it took on engineering initiatives in locations together with India, Taiwan and Myanmar — the place imposition of navy rule led to delays, shutdowns and write-downs.
The monetary squeeze has compelled the corporate to discover the sale of a mining unit and lengthen the maturity interval of about 15 billion baht value of bonds by two years. ITD shares have halved since a 2023 excessive of 1.69 baht, giving the agency a market worth of 4.5 billion baht.
“The market is nervous concerning the banks which are owed and the way a lot mortgage publicity they’ve,” mentioned Narongsak Plodmechai, chief govt officer of SCB Asset Administration. “It simply provides extra noise to the already weak market sentiment.”
ITD had whole income of 47 billion baht within the first 9 months of 2023. It swung to a lack of 45 million baht within the July-September quarter. The corporate has requested the Inventory Change of Thailand to increase the monetary assertion submitting deadline till March 29, citing ongoing info processing and opinions by its auditor.
“We now have been in shut dialogue with associated events about Italian-Thai,” Pornanong Budsaratragoon, secretary-general of the Securities and Change Fee (SEC), mentioned on Monday. “The impression will in all probability be a lot better than different circumstances if the corporate actually has monetary bother given its measurement.”
The SEC is stepping up supervision of dangerous bond issuers to spice up cost safeguards and investor confidence. Demand for high-yield debt in Thailand has waned after sequence of cost delays and company scandals, together with one associated to Stark Corp.
ITD’s income from building initiatives is inadequate to cowl total bills and a few workers haven’t been paid their full salaries, it mentioned in an trade submitting on Wednesday in response to media studies about its liquidity standing.
Ranking threat
TRIS Ranking posted a damaging “CreditAlert” on ITD’s “BB+” ranking on Jan 12 following the agency’s transfer to amend monetary covenants and lengthen bond maturities. A downgrade is probably going “ought to there be a big deterioration in its monetary place after the auditor’s prolonged assessment,” TRIS mentioned final week.
ITD’s greatest contracts embody these with authorities companies on infrastructure resembling a brand new high-speed prepare line, expressways and an intercity motorway. It was additionally the foremost contractor on Suvarnabhumi Airport, the nation’s largest facility, and the nation’s first subway line in Bangkok.
The development large was arrange within the Fifties after Chaijudh Karnasuta and Italian Giorgio Berlingieri cooperated in salvaging 5 ships that sunk within the Chao Phraya River. Youngsters of Chaijudh, together with firm President Premchai Karnasuta and Nijaporn Charanachitta, are additionally among the many high shareholders of the working agency of the Mandarin Oriental Bangkok resort, in accordance with information compiled by Bloomberg.
Mr Premchai is not any stranger to controversy. He went to jail after being convicted in December 2021 for wildlife poaching, together with of a uncommon black panther about 4 years earlier. He was launched on parole in October 2023.
Premchai Karnasuta is seen leaving Thong Pha Phum jail in Kanchanaburi previous to the completion of his time period on Dec 7, 2021. (Photograph: Piyarach Chongcharoen)
