TPI update | 5.06.05
Now that oil is trading at over 50 dollars a barrel and Thai Petrochemical Industry’s rehabilitation is making robust progress under the Finance Ministry’s administration, former owner Prachai Leophairatana has — according to him at any rate — found a financial backer either dumb or devious enough to help him regain control of the company he ruined: [Bangkok Post, May 27]
Chinese conglomerate said to seek majority stake in TPI
The China International Trust and Investment Corporation (Citic), a conglomerate owned by the Chinese government, has expressed interest in taking a majority stake in Thai Petrochemical Industry.
TPI founder Prachai Leophairatana said yesterday that he would set up a joint venture with Citic to acquire a 70% stake in TPI.
Mr Prachai recently filed a petition with the Central Bankruptcy Court to repay TPI’s outstanding debt of $2.7 billion through the new joint venture.
Mizuho Corporate Bank of Japan had committed to $300 million and China Development Bank $600 million in financing to Citic to fund the TPI acquisition, he said.
The ministry, wisely, would have none of that:
[Finance Minister] Dr Somkid, meanwhile, affirmed that the current TPI restructuring plan would move forward.
“Money is not important. Many people have expressed interest in TPI, since the company’s performance has improved considerably,” he said.
“Everyone now accepts the current plan. We don’t need a change now…. TPI has passed the point where [outside] funds are needed for rehabilitation or where there is a need to bring in new partners.”
Six days later, state-owned oil conglomerate PTT and three other agencies formally agreed to purchase a combined stake of 61.5% in TPI with the blessing of TPI’s creditors, who have long been tormented by Prachai’s obstructionism and bullying.
While I shudder at the idea of yet another state-owned enterprise and hope the government’s stake in TPI will be diluted over time, it’s fantastic that we’re finally driving the last nails in Prachai’s coffin.
In case you’re not into business and are wondering why all the fuzz about this biggest-Thai-bankruptcy-case-following-the-1997-Asian-financial-crisis type thing, may I remind you that TPI is also another example of how the international media, which has portrayed the Thaksin government as sympathetic to Prachai, goofs so badly about Thailand?
Now that I got your attention, you may proceed to linked article if you missed the first time around.