The debt-restructuring of Bangkok Mass Transit System (BTS) will drag out as foreign creditors are proposing today to the Central Bankruptcy Court to revise the rehabilitation plan submitted by the debtor.

The debtor's plan is not fair to creditors, as it would force them to take a haircut of around Bt10 billion, a source said yesterday.

After submitting their revised plan to the court, the creditors will propose it to the creditors' general meeting next Wednesday.

According to the existing plan, creditors have to swap debt into equity at Bt15.80 per share, based on the price of debentures that have been offered. However, the debentures were offered when BTS' par value was still at Bt10. BTS has since reduced its capital by cutting par value from Bt10 to Bt1 per share.

"The debt-to-equity swap price at Bt15.80 a share is too expensive as the par value is only Bt1. This means that creditors have to write off Bt14.80 per share, which is considered significant," the source said.

According to the existing plan, BTS will issue 13.8 billion new shares to new strategic investors.

However, the plan does not indicate the pricing in detail and it also fails to mention the names of the potential strategic investors, the source said. Existing shareholders would see their combined stake diluted to 7 per cent and they do not have the right to subscribe to the new capital-increase shares.

"This also is not fair to existing shareholders as they have already suffered losses from capital reduction," he said.

According to the existing plan, creditors with collateral would be paid Bt7 billion in cash, while creditors without collateral would be paid partly in cash and partly in common shares, with a total haircut of around Bt10 billion. Any debt contracts expected to arise in the future will be cancelled, while other debts, including those owed to the Bangkok Metropolitan Administration, will be paid in full.

The plan proposed by debtors will need Bt28 billion in cash for debt repayment and 1.03 billion new common shares for the debt-to-equity swap. After the par reduction, shares of BTS will be reduced from 12 billion to 1.2 billion.

As of November 3, creditors are expecting to get paid Bt77.73 billion, of which Bt54.89 billion is for principal. However, the administrative planner believes some of these debts are redundant and the real amount should be Bt67.77 billion.

BTS chairman Keeree Kanjanapas, who serves as the Skytrain operator's planner, said that after the creditors meeting on November 29, the court would rule on whether to approve the plan.

Earlier, Thai Asset Management Corp together with three other debtors proposed to reject the existing plan, saying that splitting creditors into groups is unfair.

Keeree said categorising debtors was in line with law and fair.

Siriporn Chanjindamanee

The Nation