In the past three months, the country's largest bank in terms of assets has sold its shares in four subsidiaries with a combined value of Bt1.66 billion. One of the four is Bangkok Industrial Gas in which the bank has reduced its shareholding from 18.48 per cent to 9.90 per cent, getting proceeds of Bt485.88 million.

The bank earned Bt82.50 million from sale of 476.49 million shares in EMC, accounting for 5.25 per cent of the company's total paid-up capital. Following the transaction, BBL has decreased its shareholding in the construction firm from 14.29 per cent to 9.04 per cent.

CP Plaza is another non-core business of which the bank has sold 73.72 million shares for Bt1.08 billion. Sri U-Thong is the other company in which the bank has diluted its shareholding from 26.93 per cent to 6.74 per cent. The bank sold 21.50 million shares in the electricity substation and transmission line company for Bt15 million.

Bangkok Bank's senior vice president Suvarn Thansathit said the bank was attempting to sell out its non-core businesses to comply with the central bank's regulation that allows the bank to hold shares in non-core business at a limited level. But it has been quite difficult to sell shares in the current economic climate. Some companies remain weak in terms of business operation and financial status and hence are not attractive enough for the investors, he said.

The bank's stakeholding in these companies mostly comes from debt-restructuring practice by the debt-to-equity conversion method. The bank has given assistance to the businesses but some of them have not recovered yet. 

"In some cases, the bank has helped them in every possible way, including haircut, interest-rate reduction, term-loan extension and even injecting money into them. But their businesses are still moribund and hence it has not been easy to sell them," he said. 

Around one-third of companies that are still in the debt-restructuring process were granted new loans from the bank and most of them have been improved.   

Grish Attagrish, executive vice president of Siam Commercial Bank, said that under the bank's debt-restructuring plan, it needed many instruments, including injection of new loans, to help  customers turn their businesses around.

Somruedi Banchongduang

The Nation