Thai Petrochemical Industry Plc (TPI) will likely take out one-year bridging loans worth between US$800 million (Bt30.4 billion) and $900 million in the next two months, and delay plans to sell bonds until next year.

Prasert Bunsumpun, PTT Plc president and vice chairman of the TPI board, said yesterday the short-term financing would improve the company's liquidity.

"When some old debts are retired, the company's ratings will improve. A year after this, we will reconsider when to issue bonds," he told reporters.

He also hinted at the possibility securing long-term loans if the bond sale is scrapped altogether.

TPI's shareholders at an extraordinary meeting last week approved the sale of unsecured, unsubordinated debentures worth $600 million, as part of a $1-billion refinancing deal.

TPI president Piti Yimprasert told reporters at the time that due to its poor corporate rating, which would force the issuer to offer a higher coupon rate, TPI might instead opt to raise the entire amount in short-term loans.

He had said he wanted to float 10-year bonds by the end of September but that bridge financing was a fallback because the bond sale could be time-consuming.

Debt refinancing will save TPI around Bt200 million a year in interest expenses and reduce the number of its creditors, which number more than 100, he said. The move will also allow the company to move forward more easily with capital investment plans.

Prasert said that after the financial restructuring, TPI would focus on improving the productivity of old plants before investing in new ones.

"We will see what needs to be done first," he said.

 The company plans to invest $1.4 billion over three years, mainly to develop its oil-refining operations.

He said that TPI would benefit from the new shareholding structure, which includes PTT as a major owner.

"The equity participation will create synergy, particularly in raw-material procurement. We can also cooperate in transportation because we're operating in related industries."