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Published on February 21, 2008

Bangkok Mass Transit System (BTS) president Keeree Kanjanapas says his company will be able to complete its Bt77-billion debt restructuring by April once it finds new strategic partners to buy 12 billion new shares, in accordance with its debt-rehabilitation plan.

Keeree and his strategic partners also plan to buy their shares back from creditors, increasing their shares from less than 5 per cent to 60 per cent after the company exits the debt-rehabilitation plan in April. This will enable Keeree to reclaim control of BTS.

Keeree said the new government policy of managing the Skytrain itself was an impossible idea and that he believed "private-sector interests", such as himself, were capable of operating the business.

Keeree said the company would complete its debt-rehabilitation plan worth Bt77 billion this month and then about the middle of next month file a request with the Central Bankruptcy Court to exit the plan.

"We believe the court will consider our plan and approve it in April. We'll then proceed with the filing process for becoming a listed company on the Stock Exchange of Thailand in the third quarter, having been delayed from last year," he said.

BTS entered its debt-rehabilitation plan on January 31, 2007, after the Central Bankruptcy Court approved it.

Under the plan, BTS must reduce its paid-up capital from Bt12.1 billion to Bt1.21 billion by reducing its par value from Bt10 a share to Bt1, in order to reduce its net loss. The company must then increase its registered capital from Bt1.21 billion to Bt16.4 billion by issuing 15.19 billion new shares.

Then the creditors must convert company debt worth Bt18.9 billion to BTS's share volume of 1.2 billion shares at a convertible price of Bt15.80 apiece.

The remaining 12 billion shares will be sold to its strategic partner after exiting from the debt-rehabilitation plan, and 1.99 billion shares will raise funds from the capital market at a price yet to be decided. Payment of the balance of its total debt worth nearly Bt50 billion will be rescheduled to eight years from now by discounting the price 52 per cent.

Some of the company's creditors have filed a request to reject the company's debt-rehabilitation plan, because they believe it to be unfair to them.

Keeree said the company had now succeeded in negotiating with its creditors, as well as in selling its 12 billion new capital shares to its new strategic partners. As a result, the company believes it will exit the debt-rehabilitation plan in April.

Keeree declined to disclose the names of the new strategic partners, but they are four financial firms: two from the United States, one from Japan and one from Australia.

Earlier, Keeree said a number of investors, such as the Dubai Investment Group, which now holds some shares in Keeree's Thanayong property arm, were interested in buying a major stake in the company.

Keeree added that the company had appointed four financial firms - Deutsche Bank, Merrill Lynch, Phatra Securities and Kim Eng Securities (Thailand) - to serve as its financial advisers in selling the rest of its 1.99 billion new shares: 40 per cent to foreign investors and 60 per cent domestically.

BTS now records average daily revenue of Bt6 million, with 450,000 passengers a day, lower than its original estimate of 600,000 a day.

The company's revenue thus far in fiscal 2008 (April 2007-March 2008) has recorded slight growth of only 4 per cent compared with fiscal 2007.

However, the company believes revenue will increase 7 per cent this year, because of oil-price rises that will encourage commuters to use the Skytrain rather than their cars.

Earlier, BTS signed a US$70-million (Bt2.28 billion) contract for 12 trains of four carriages each with Changchun Railway Vehicles and Citic International - both of China - and Mitsui (Thailand). The trains will be delivered to the company next year. This is part of a planned business expansion for after the company's debt rehabilitation is complete, Keeree said.

Somluck Srimalee

The Nation