Thai Petrochemical Industry Plc's board of directors has approv-ed the company's plans to raise US$1 billion (Bt38.3 billion) to refinance its debts, a move which it hopes will save the company more than Bt400 million per year in interest.

Piti Yimprasert, president of the petrochemical company, said that out of the amount, $600 million will be raised through an unsecured unsubordinated bond issue with a maturity of less than four years.

The board also approved taking out a $400 million loan - 70 per cent of which will be in US dollars, and the rest in baht. The proceeds will be used to refinance current loans.

Both bond and the refinancing loan will be carried out in Septem-ber, depending on the approval of shareholders who meet on July 20.

"The fund raising will reduce the company's interest expenses by Bt300 million-Bt400 million a year, starting in 2007," Piti said. At present, the company pays an annual interest rate of 5-6 per cent.

"The bond's coupon rate will depend on the credit rating. We're commissioning Standard & Poor's or Moody's Investors Service to rate the company. Hopefully, the bond can be issued in September," Piti said.

On July 20, the new management team, led by representatives of PTT, which has become a major shareholder of the company, will present the three-year investment plan, which requires an investment of $1.4 billion, to shareholders.

Piti said the Stock Exchange of Thailand would lift the "C" sign from TPI's stock next month, after the company's founder, Prachai Leophairatana, was discharged from the board of directors, as demanded by the exchange.

The "C" sign means the company still has to fulfil certain obligations to the exchange.

"The lifting of the 'C' sign should have a positive impact on the company's stock price and also raise the corporate rating. Right now, TPI share price could be a bit low, but that is a result of the decline in global markets," Piti said.

TPI's new management still has to fight the resistance of Prachai.

Though ousted from TPI's board, Prachai still retains power through the management of five subsidiaries including TPI Oil Co Ltd.

TPI had previously asked Prachai to host shareholder meetings for the five subsidiaries by June 25.

"If he still refuses to do so, TPI will exercise its shareholder's right in calling for the meeting," Piti said.

Piti said that TPI continued to supply oil to TPI Oil, which has incurred accumulated unpaid bills of Bt2 billion. Prachai has paid down some of the debt.

"However, the repayment covers a one-week supply of oil. After that, if he does not clear the debts, TPI will immediately halt the supply."