Beleaguered bottled gas manufacturer, Picnic Corp Plc, has been able to sell only 136,585 of a total of 1.48 billion newly released shares, the issue of which was intended to lift it of a financial wilderness.

The number of new shares sold indicates that even Picnic's major shareholders rejected a full exercise of their right to take up one new share for every two held shares at one baht per new share.

The failed rights offering leads to a greater chance that the ailing firm will tumble into bankruptcy if its creditors take legal action against it. The share offering appeared to be the last chance for Picnic to raise money to repay its debts.

But, there may yet be a slender chance of recovery. Its shareholders recently gave the company an option to sell the leftover shares through a private placement to specific investors and if there are shares leftover, the company can allot them to creditors under a debt-to-equity swap.

Picnic told the Stock Exchange of Thailand (SET) yesterday that five Thai juristic persons had bought 64,637 shares, while a further 12 Thais had bought 71,948. The company didn't name any of the buyers.

Picnic's subscription period started April 24 and ended April 28. Although existing shareholders were eligible to buy the new shares at Bt1 each, this was well above the market price at that time of around Bt0.70 to Bt0.72.

The stock closed yesterday at Bt0.69 a 2.8-per-cent drop on the day.

Picnic's major shareholders as of April 7, 2006, were Supaporn Lapvisuthisin, who held 105.16 million shares; Theeratchanon Lapvisuthisin, 95 million; Puangpetch Siriatchariyakul, 90 million; and Ranee Uataweekul, 85 million, according to the SET.

Earlier, the SET took the unusual step of warning investors that Picnic was on

the verge of bankruptcy. The bourse said Picnic would find difficulty succeeding in raising funds through its share offering because the price was far above the market price. It added that the company's liabilities at the end of 2005 exceeded its assets.

Four asset-management companies have filed lawsuits against Picnic, seeking repayment of Bt295.8 million in debts, the result of defaulted bills of exchange. It has agreements with other asset-management companies, which hold Bt283.8-million worth of bills of exchange, to hold off legal action until June 30, in return for interest payments.

Sumitomo Mitsui Banking Corporation's local branch has also filed suit against Picnic, demanding repayment of Bt429 million in debt incurred from a letter of guarantee. Picnic is reportedly negotiating with the Japanese bank for debt repayment based on a debt-to-equity swap.

The cooking-gas manufacturer's financial troubles began in the middle of last year when its two major shareholders and former executives, Supaporn and Theeratchanon Lapvisuthisin, were charged with accounting fraud and dishonest management.