04 March 2002 07:42 [Source: ICIS news]
SINGAPORE (CNI)--An independent auditor has been called in by the Thai Asset Management Corp (TMC) to try to restructure the debts of the National Fertiliser Co (NFC) after two local banks decided it was too risky to make a loan to the cash-strapped company. The TMC was set up by the government in 2000 to restructure bad debt.
An NFC source told CNI on Monday that the Krung Thai Bank and Siam City Bank had decided it was too risky to go ahead with a Baht900m ($20.6m/Euro23.8m) loan to the company to help it overcome an acute shortage of working capital until or unless a debt restructuring plan had been agreed.
The source said that NFC's principle debt stood at Baht8.3bn at the end of 2001, with outstanding interest of Baht2.6bn.
Independent auditors Deloitte Touche Tohmatsu are expected to take at least two months, and possibly more, to come up with a debt restructuring plan.
The source said it was not a problem for NFC to struggle through until the new plan was finalised since it had 70 000 tonne of fertiliser in inventory which is worth about Baht1bn.
NFC was hoping to raise the loan to meet its costs, including buying feedstock for its fertiliser operations, after a Baht600m loan made in August last year by the Petroleum Authority of Thailand (PTT) runs out at the end of March 2002.
NFC is currently operating its fertiliser plant at 40% of its full capacity to cut costs. The plant's full capacity is 1m tonne/year.
The source said NFC was expected to report a net loss of about Baht1.5bn for its 2001 financial year to 31 December on net sales of about Baht5bn. Its official financial results for 2001 are due to be published next week.
NFC is hoping to produce 620 000 tonne of fertiliser in 2002 and claims that it can turn its operating losses of previous years into a Baht400m operating profit this financial year.
NFC has incurred losses since mid-1997 when the rapid fall in the value of the Thai baht hit the company and triggered the Asia-wide recession.
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