Image courtesy of Pattarapong Chatpattarasill

Thailand’s main building agency, Italian-Thai Development Plc (ITD), is grappling with a liquidity crisis that has alarmed traders, regulators, and score companies. This state of affairs follows a collection of native company scandals and debt defaults which have already unnerved the market.

ITD confirmed yesterday, March 13, that it’s searching for new loans from banks to alleviate the present money crunch that has resulted in delayed funds to workers and contractors. Buying and selling of ITD shares was halted this month following the corporate’s failure to submit its 2023 full-year monetary assertion on time. The corporate’s whole liabilities as of September 30, together with bonds, loans, and commerce credit score, amounted to 108 billion baht (US$ 3 billion).

From 2020 to 2022, ITD registered a cumulative lack of roughly 6 billion baht (US$168 million), following its endeavor of engineering tasks in areas resembling India, Taiwan, and Myanmar. The imposition of army rule in Myanmar led to undertaking delays, shutdowns, and write-downs.

On account of the monetary pressure, ITD is contemplating promoting a mining unit and lengthening the maturity interval of bonds price about 15 billion baht (US$ 420 million) by two years. The corporate’s shares plummeted by half from a 2023 excessive of 1.69 baht (US$ 0.047), leading to a market capitalisation of 4.5 billion baht (US$126 million).

Narongsak Plodmechai, the CEO of SCB Asset Administration, pointed to a weak market.

“The market is nervous concerning the banks which can be owed and the way a lot mortgage publicity they’ve. It simply provides extra noise to the already weak market sentiment.”

ITD reported whole income of 47 billion baht (US$ 1.3 billion) within the first three quarters of 2023 however swung to a lack of 45 million baht (US$ 1.26 billion) within the July-September interval. The corporate has requested an extension of the monetary assertion submitting deadline to March 29 from the Inventory Change of Thailand, attributing the necessity for an extension to ongoing data processing and auditor evaluations.

Monetary crisis

Pornanong Budsaratragoon, the Secretary-Normal of the Securities and Change Fee (SEC), revealed the severity of the state of affairs on Monday.

“We now have been in shut dialogue with associated events about Italian-Thai. The impression will most likely be a lot better than different instances if the corporate has monetary hassle given its dimension.”

The SEC is intensifying its oversight of dangerous bond issuers to reinforce cost safeguards and bolster investor confidence. The demand for high-yield debt in Thailand has declined following a collection of cost delays and company scandals.

ITD admitted in an change submitting on Wednesday that its building undertaking revenues are inadequate to cowl total bills, and a few workers haven’t obtained their full salaries.

TRIS Ranking issued a destructive CreditAlert on ITD’s BB+ score on January 12, following the corporate’s transfer to amend monetary covenants and lengthen bond maturities. TRIS indicated final week {that a} downgrade is probably going if there’s a important deterioration in ITD’s monetary place after the auditor’s prolonged overview.

ITD’s main contracts embrace infrastructure tasks with authorities companies, resembling a brand new high-speed prepare line, motorways, and an intercity motorway. ITD was additionally the principal contractor on Suvarnabhumi Worldwide Airport, the nation’s largest facility, and Bangkok’s first subway line.

The development behemoth was established within the Nineteen Fifties by Chaijudh Karnasuta and Italian Giorgio Berlingieri following their collaboration in salvaging 5 sunken ships within the Chao Phraya River. Chaijudh’s youngsters, together with ITD President Premchai Karnasuta and Nijaporn Charanachitta, are additionally among the many prime shareholders of the Mandarin Oriental Bangkok lodge’s working agency, reported Bangkok Publish.

Premchai, not a stranger to controversy, was sentenced to jail in December 2021 for wildlife poaching, together with a uncommon black panther. He was launched on parole in October 2023.

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