The information is required by next Tuesday to allow shareholders to digest the situation ahead of the company's rights issue subscription from April 24-28.

The SET has requested the embattled firm to clarify five issues. Two involve trade receivables - with JJ Land and Sun City Golf and Country Club in the amount of Bt254 million and with 18 members of gas-filling groups in the amount of Bt719 million.

A Bt1.02-billion deposit for the purchase of large gas cylinders by Picnic and its subsidiaries, Bt59 million in management fees and revenue from the sale of petroleum oil with VSP Marine Shipping, and negotiations with creditors to convert Bt838 million of short-term loans into long-term ones are the other issues.

"Picnic is required to explain the reasons for the cancellations on the remaining portions [of the receivables] and the resulting effects this had on installation and service income in 2005 as well as the collection progress for the receivables," the SET statement said.

According to Picnic's 2005 financial statements, the company in the fourth quarter amended construction contracts with JJ Land and Sun City to cancel leftover jobs with the resulting contract value reduced by Bt260 million.

The SET required Picnic to explain the reasons for its expansion into gas filling, and to provide details of the leases and the collection of receivables with the 18 gas-filling groups.

The auditor's report expressed the view that Picnic had sold gas to the group at prices set 16-19 per cent higher than with normal customers, and with credit terms set at 90 days.

The 18 gas-filling companies had discontinued their distribution business and Picnic and a subsidiary had entered into agreements to lease all 18 plants.

Picnic is required to report on the progress of the cylinder delivery and related deposit claims, provide reasons why the firm cancelled some purchasing agreements and explain the procedures taken to reclaim deposits.

Referring to information at www.bol.co.th that Waravoot Lapvisutisin, a Picnic director, holds 100 per cent of VSP Marine Shipping Co, Ltd, the SET considered the management fees and oil transactions of the two firms as possibly connected transactions.

It asked Picnic to clarify VSP's shareholder structure and relationship with Picnic, details of the two related transactions, pricing policies, and the method of payment.

Picnic has been sued by three asset-management companies that hold its overdue bills of exchange. The company said it would use proceeds from the share allocation to settle the debts and it would convert debts into equity if the capital-increase exercise fails.

The company has proposed issuing 1.48 billion new shares to its existing shareholders at a ratio of one new share with par value of Bt1 for every two held.

But the plan has raised doubts about its success because the offering price is well above the stock's market price.

Siriporn Chanjindamanee

The Nation