SMC starts to restructure debt
The state-owned Secondary Mortgage Corp has begun restructuring debts amounting to Bt1.036 billion, in an effort to reduce its high rate of non-performing loans, SMC chairman and Fiscal Policy Office director-general Naris Chaiyasoot said yesterday.
SMC sources said the ailing and corruption-ridden corporation had become trapped in rising bad debts, largely from mismanagement. Its bad loans have risen to Bt1.99 billion, or 44 per cent of its lending. Naris said the SMC had begun to restructure debts of Bt1.036 billion. Bt430 million has been revamped so far. He said the SMC also planned to sell bad debts worth Bt710 million to an asset-management company by the end of November, and in a worst-case scenario, the corporation's capital may be diluted to about Bt550 million from its registered worth of Bt1 billion. However, the SMC still has enough capital to provide loans to the secondary-mortgage market. Naris said the SMC was taking legal action against 119 borrowers over claims they used forged financial statements to obtain loans. These people bought houses worth a combined Bt268 million in two projects. He said it would use "special means" to resolve this debt. The commission is also taking legal action against six former executives and staff members, as well as against Thai Keha Credit Foncier Co, a loan originator. Naris said the Finance Ministry still wanted to run the SMC, although it faced financial difficulties in supporting the mortgage market at a time of low financial liquidity.
Wichit Chaitrong
The Nation
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