Thailand’s main building agency, Italian-Thai Improvement Plc (ITD), is grappling with a liquidity disaster that has alarmed buyers, regulators, and score companies. This state of affairs follows a sequence of native company scandals and debt defaults which have already unnerved the market.
ITD confirmed yesterday, March 13, that it’s searching for new loans from banks to alleviate the present money crunch that has resulted in delayed funds to staff and contractors. Buying and selling of ITD shares was halted this month following the corporate’s failure to submit its 2023 full-year monetary assertion on time. The corporate’s complete liabilities as of September 30, together with bonds, loans, and commerce credit score, amounted to 108 billion baht (US$ 3 billion).
From 2020 to 2022, ITD registered a cumulative lack of roughly 6 billion baht (US$168 million), following its endeavor of engineering tasks in areas reminiscent of India, Taiwan, and Myanmar. The imposition of army rule in Myanmar led to undertaking delays, shutdowns, and write-downs.
On account of the monetary pressure, ITD is contemplating promoting a mining unit and increasing the maturity interval of bonds price about 15 billion baht (US$ 420 million) by two years. The corporate’s shares plummeted by half from a 2023 excessive of 1.69 baht (US$ 0.047), leading to a market capitalisation of 4.5 billion baht (US$126 million).
Narongsak Plodmechai, the CEO of SCB Asset Administration, pointed to a weak market.
“The market is nervous in regards to the banks which can be owed and the way a lot mortgage publicity they’ve. It simply provides extra noise to the already weak market sentiment.”
ITD reported complete income of 47 billion baht (US$ 1.3 billion) within the first three quarters of 2023 however swung to a lack of 45 million baht (US$ 1.26 billion) within the July-September interval. The corporate has requested an extension of the monetary assertion submitting deadline to March 29 from the Inventory Change of Thailand, attributing the necessity for an extension to ongoing info processing and auditor evaluations.
Monetary disaster
Pornanong Budsaratragoon, the Secretary-Common of the Securities and Change Fee (SEC), revealed the severity of the scenario on Monday.
“Now we have been in shut dialogue with associated events about Italian-Thai. The impression will in all probability be a lot better than different instances if the corporate has monetary bother given its dimension.”
The SEC is intensifying its oversight of dangerous bond issuers to reinforce cost safeguards and bolster investor confidence. The demand for high-yield debt in Thailand has declined following a sequence of cost delays and company scandals.
ITD admitted in an change submitting on Wednesday that its building undertaking revenues are inadequate to cowl general bills, and a few staff haven’t obtained their full salaries.
TRIS Score issued a detrimental CreditAlert on ITD’s BB+ score on January 12, following the corporate’s transfer to amend monetary covenants and lengthen bond maturities. TRIS indicated final week {that a} downgrade is probably going if there’s a vital deterioration in ITD’s monetary place after the auditor’s prolonged overview.
ITD’s main contracts embrace infrastructure tasks with authorities companies, reminiscent of a brand new high-speed practice line, motorways, and an intercity motorway. ITD was additionally the principal contractor on Suvarnabhumi Worldwide Airport, the nation’s largest facility, and Bangkok’s first subway line.
The development behemoth was established within the Nineteen Fifties by Chaijudh Karnasuta and Italian Giorgio Berlingieri following their collaboration in salvaging 5 sunken ships within the Chao Phraya River. Chaijudh’s kids, together with ITD President Premchai Karnasuta and Nijaporn Charanachitta, are additionally among the many high shareholders of the Mandarin Oriental Bangkok resort’s working agency, reported Bangkok Put up.
Premchai, not a stranger to controversy, was sentenced to jail in December 2021 for wildlife poaching, together with a uncommon black panther. He was launched on parole in October 2023.
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