TPI's asset sell-down on track

TPI is regarded as among Thailand's most heavily indebted companies

In this story: Interest in power assets Prachai fighting rearguard action in courts RELATED SITES

BANGKOK, Thailand (CNN) -- Executives from corporate doctor Ferrier Hodgson are confident of reaching a year-end target of $200 million in non-core asset sales from heavily indebted Thai Petrochemical Industries plc (TPI).

TPI, which owes $3.8 billion, is being managed by Effective Planner, a subsidiary of the Australian firm Ferrier Hodgson, the company appointed by the Thai Bankruptcy Court to salvage TPI.

Ferrier Hodgson (Thailand) managing director, Anthony Norman was confident of achieving the asset sell-off target.

"I entirely expect that we will deliver the plan on time,'' Norman said in an interview.

The sale of TPI's non-core electricity and steam generating assets would be completed by the end of September, with a memorandum of understanding to be signed by end April.

Interest in power assets

Norman would not identify a price or possible buyers. But he said there was ``a high level of interest, with at least half a dozen serious players'' interested in purchasing power assets.

Ferrier Hodgson was appointed by the Bankruptcy Court in March last year to oversee TPI's debt rehabilitation after drawn-out negotiations between creditor banks and TPI's senior management, led by chief executive Prachai Leophairathana, failed to reach an agreement.

Creditor banks included Bangkok Bank plc, the World Bank's International Finance Corp, the U.S. Export-Import Bank, and Citibank. Ferrier Hodgson recently announced a debt for equity swap in which the banks now hold a 75 per cent stake in TPI.

Through a program of non-core asset sales and drawing on cash flow, the plan is reduce TPI's debt to $1.75 billion by December 2004.

Effective Planner is overseeing TPI and the group's seven subsidiaries, including TPI Oil Co, Thai ABS Co, TPI Polyol, Thai Polyurethane Industry Co, TPI Energy Co, TPI Aromatics, and Rayong Tank Terminal Co.

Prachai fighting rearguard action in courts

But Prachai has continued to fight a rearguard action through a series of legal challenges, including the filing of both civil and criminal charges against Ferrier Hodgson executives.

The cases include a charge brought before the Labour Court which challenged the right of Ferrier Hodgson to force Prachai to step down last December as TPI's chief executive officer.

Norman termed the legal moves a ``sideshow''.

``It's a sideshow and is not impeding the process (of debt rehabilitation). I hope it will be exposed for the bunch of nonsense that it is.'' At the same time, he conceded the uncertainties created by the legal moves were hampering efforts to raise working capital.

`This is proving quite difficult,'' he said. ``New lenders don't like uncertainties like (court) appeals being around''.

TPI last traded at 1.90 baht on the Stock Exchange of Thailand.

Thai Petrochemical Industries

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