Thai Petrochemical Industry Plc will maintain its 2006 revenue target at Bt220 billion-Bt240 billion even though it will shut down its refinery for renovation. The temporary closure is expected to cost the company Bt15 billion in sales.

The annual renovation is scheduled for November, said Piti Yimprasert, the company's president, at a meeting

attended by more than 3,000 shareholders in Rayong yesterday.

At the meeting, 93 per cent of shareholders voted to oust the company's founder, Prachai Leophairatana, as director to comply with an order from the Securities and Exchange Commission.

They also approved the issuance of US$600 million (Bt22.8 billion) worth of unsubordinated, unsecured debentures for sale to foreign investors.

The bond issuance is part of the company's plan to raise $1 billion to refinance its debts, an effort that it expects will reduce its annual interest expenses by Bt200 million.

"After Khun Prachai's departure, we may need to revamp the management structure but we may not need a new person to replace him," Piti said. He added that Prachai could veto the resolution. If that happens, the issue would be presented again to shareholders at a meeting next year.

He said that the Stock Exchange of Thailand would lift the "C" sign on the company's stock next week after Prachai's departure. The sign stands

for "compliance" and is a warning to investors that the com-

pany still has unresolved compliance issues with the stock exchange's rules and regulations.

Shareholders yesterday also approved a $1.2-billion investment plan. About $800 million to $900 million would go towards upgrading the refinery to improve the quality of its diesel output.

Another $200 million to $300 million will go towards developing an electricity plant with capacity to produce 200-300 megawatts a year. The remaining $30 million-$50 million will be spent on improving the company's port to accommodate bigger vessels, which will reduce the company's logistics cost.

On the refinancing issue, Piti said that although the shareholders approved of the bond issue, the company might opt to borrow the entire $1 billion through a "bridge financing" facility.

"Short-term loans could be cheaper than bonds, as the company's rating is not high enough [to offer low coupon rates]," he said.

He said that TPI's board of directors would meet in two weeks to decide if the company would in fact issue the $600 million in bonds and borrow the remaining $400 million or raise the entire $1 billion through short-term loans.

Chalida   Ekvitthayavechnukul

The Nation