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CEMENT

TPI Polene sees end of debt restructuring

Firm to complete plan before new line expansion

Published on March 29, 2008



TPI Polene expects to complete refinancing of its restructured debt this year before completing its fourth cement line at an additional cost of Bt6 billion.

Its liabilities under restructuring and rehabilitation are worth Bt8.04 billion, but it will pay down US$10 million (Bt315 million) next Monday.

"We're negotiating with five creditors. If we succeed in refinancing the restructured debt, we'll file a petition with the Bankruptcy Court requesting to exit business-reorganisation proceedings as soon as possible, in order to move on with our investment projects," Prasert Ittimakin, senior vice president for finance and accounting, said yesterday.

TPI Polene has already spent about Bt3 billion on the infrastructure for the new cement line, which will have annual production capacity of 3 million to 4 million tonnes.

The project needs Bt6 billion more for equipment and machinery and 18-24 months before it goes on stream.

"We expect to complete the plant rapidly. However, we need to consider market conditions carefully and prioritise our financial activities before making a final decision," Prasert said.

The company has targeted revenue growth of 5-7 per cent this year from last year's Bt26.93 billion, with petrochemical prices remaining high and cement prices rising slightly.

It will focus more on petrochemicals, making low-density polyethylene (LDPE) and ethylene vinyl acetate copolymer (EVA).

Its gross profit margin this year is expected to be higher than last year's 23 per cent, due mainly to the high spreads of LDPE and EVA.

Last year, TPI Polene exported 30 per cent of its LDPE and EVA output.

Its cement and concrete business is forecast to expand 3-5 per cent, assuming that the overall market remains flat this year.

However, domestic cement and concrete consumption will surge next year, due mainly to the government's mega-projects, he said.

Four of 13 brokerages that analysed TPI Polene's financial results and stock from January 8 to yesterday have recommended "hold" on its shares. Almost all of them are concerned about the company's legal problems after the Criminal Court on February 15 found the company and manager Prachai Leophairatana guilty of stock manipulation and imposed a fine of Bt6.9 billion.

The four brokerages are Kim Eng Securities (Thailand), Syrus Securities, Asia Plus Securities and I V Global Securities.

However, Capital Nomura Securities, Tisco Securities, Seamico Securities and BFIT Securities suggest "buy", with a target price of Bt8.79 to Bt10.60 per share.

TPI Polene closed up 10 satang at Bt6.90 yesterday. Its price-to-earnings ratio is 5.89.

Chalida Ekvitthayavechnukul

The Nation



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