Its director Chamni Janchai said the company would take a 70-per-cent stake in the steelmaker by buying sizeable capital increased shares.

Burapa Steel has a maximum annual production capacity of 300,000 tonnes, although it has been operating at just 20,000-30,000 tonnes. The initial plan is to raise output to 100,000 tonnes per year.

After the deal, the efficiency of Burapa Steel's machinery will be improved to beef up its competitiveness ahead of listing the company on the stock market next year.

The company has yet to assign a financial adviser for the planned listing, Chamni said.

"We are confident the plan will not collapse," said Chamni.

"We will initially raise the company's output to 100,000 tonnes per annum. In the past, Burapa Steel had Bt20 million in working capital and ran at a capacity of tens of thousands of tonnes, yet its sales amounted to Bt1 billion."

A manufacturer of heat-exchange units for automobiles and room air-conditioning, Thai Heat has sufficient funding to finance the takeover and its business expansion plan.

"We have the money to fund a Bt340-million takeover and we also have another Bt100 million for the company's working capital," Chamni said.

Thai Heat is waiting for the Central Bankruptcy Court's approval to turn the company back to solvency, he said.

"We want financial institutions to trust us, though we

have yet to get back to normal status because we have been concentrating on the takeover," he said.

Thai Heat has this year set

a sales target of Bt400 million

for its air-conditioning busi-ness.

Siriporn Chanjindamanee

The Nation