Published on October 18, 2005
The Stock Exchange of Thailand (SET) suspended trading in shares of Thai Durable Group Plc (TDT) yesterday after the company failed to clarify an allocation of new shares to shareholders at lower-than-market price.
The bourse’s “SP” sign was posted in the afternoon session after TDT failed to provide additional information to the SET. In the morning session, the SET posted a halt sign on a private placement of TDT stock, allocated to its shareholders.
Yesterday, the textiles group informed the SET of the new share allocation – amounting to 141.91 million shares with a par value of Bt7.1 a share – to shareholders at a price of Bt0.88 apiece. This compared to Friday’s closing price of Bt1.02. The stock was trading at Bt0.99 when it was suspended. The company’s managing director, Phakarat Visudhimark, said in a statement to the SET that his company had allocated 36 million new shares to Lalit Denduangrudee, 50 million to Chanchai Denduang-rudee and 55.91 million to Yan Wai Man, at a price of Bt0.88. “The price is the average weighted closing price of ordinary shares of the company on the Stock Exchange of Thailand for not less than seven business days retroactively before the offering date,” the company said in its statement. “The offer of shares for sale to the purchasers was scheduled from October 14 to October 20, 2005.” The company also reported progress yesterday in its rehabilitation plan over the six months to September 30. It said it had reserved Bt13.6 million for compensation pending the outcome of a legal dispute with former employees. On its operations and financial status, the company said that due to a shortage of cash to acquire raw materials and spare parts sufficient for production, sales volume was down on that for the same period last year. The high price of oil resulted in high prices for raw material and electricity, and cancellation of import restrictions had brought increased competition, particularly from low-priced products from China. TDT said it was in the process of negotiating with a bank for postponement of a defaulted loan with outstanding principal of about Bt241 million. The company has sold some obsolete, high-cost production equipment and non-producing machines to help ease its cash flow, and plans to sell more. In addition, it will downsize its production capacity, reduce its staff, and shift to making higher quality finished products, its statement said. TDT recorded a second-quarter net loss of Bt58.87 million, compared with a net loss of Bt74.03 million in the same period last year. This was mainly due to higher polyester costs at a time when the company was unable to adjust its prices because of strong competition. Its sales in the second quarter declined Bt55.78 million, or 25.89 per cent, on figures for the same period last year. Its interest payment burden was Bt15.78 million, compared with Bt7.87 million in the same period last year. Recently, the company’s auditor issued a disclaimer of opinion on the company’s financial statement, due to uncertainty of its operations. TDT’s current liabilities exceed current assets by Bt331.2 million. It has also defaulted on short- and long-term debts amounting to Bt240.6 million. Siriporn Chanjindamanee The Nation
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