Eastern Wire Plc (EWC) reported a second-quarter net loss of Bt516.32 million after setting aside reserves to cover a doubtful Bt500-million loan to its subsidiary Siam General Factoring Plc (SGF).

The wire-maker posted a net profit of Bt28.65 million in the same period last year.

"The company's net loss amounted to Bt516.32 million after recording a Bt9.13-million loss through a joint-venture company and a Bt9.49-million loss through assets. Overall, the company and its subsidiary had to set aside Bt528.29 million to cover doubtful accounts [of which Bt500 million is for SGF]," the company said in a filing with the Stock Exchange of Thailand.

The losses and reserves wiped out the company's profits. The company blamed the disappointing results on declining revenue and growing sales and administrative expenses. Because of the quarterly net loss, the company's first-half earnings slid to a net loss of Bt475.91 million, compared with a net profit of Bt49.37 million in the same period last year.

In a filing to the SET on Tuesday, the company reported that its board of directors had decided the company would not accept transfer rights for other debt claims from SGF in lieu of debt repayment. The filing also said the directors would take legal action against SGF. SGF had earlier issued two batches of promissory notes worth a combined Bt500 million to EWC. The notes became due on June 15-16, but the company failed to service the debt. Instead, SGF transferred the right of debt claims to EWC.

Separately, SGF reported a second-quarter net loss of Bt587.66 million, compared with a Bt15.65-million net profit in the same period last year. The company blamed the net loss on the increased allowance for Bt88.58 million worth of doubtful debt that was overdue by six months. It also had to set aside more to finance its Bt500 million debt with EWC.

Meanwhile, the SET suspended trading of shares of Daidomon Plc, Datamat Plc, Bangkok Steel Industry Plc, and Agro Industrial Machinery Plc because they had failed to report their second-quarter earnings as scheduled.

The SET also advised investors and shareholders in Kuang Pei San Food Products Plc to study the auditor's report on the firm's financial statement ending June 30, because they could not reach a conclusion on the statement.