• 
• 

Published on December 14, 2007

The Securities and Exchange Commission revealed yesterday that Prachai sold 30.75 million TPIPL shares on December 7 for Bt256.85 million, at Bt8.35 each.

The head of the Matchima Thipataya Party insisted he was not abandoning TPIPL but was only making himself eligible for political office after the December 23 general election.

"It's nothing important. I transferred the stock to a Leophairatana company. This is to clear my assets to support my entering politics," Prachai was quoted as saying yesterday by Reuters. "I definitely won't abandon TPI Polene," he added.

He said he could not recall the extent of the Leophairatana family's shareholding in TPIPL, but it is the major shareholder and management. TPIPL stock fell 6 per cent to close at Bt7.80 yesterday.

On December 3, Prachai, who is also chairman of the planner for TPIPL's rehabilitation, was convicted by the Criminal Court of manipulating TPIPL stock and sentenced to three years in jail and a fine of Bt6.93 billion. However, he has filed an appeal and is out on bail.

Earlier, the Rehabilitation Court approved TPIPL planner's request for an extension of the company's rehabilitation period and extended it by one year to December 31, 2008.

An analyst at Kim Eng Securities (Thailand) said the extension meant TPIPL would bear a high interest burden until next year at the minimum lending rate plus 1.5 per cent, plus fee expenses of 1 per cent. Kim Eng has therefore reduced TPIPL's earnings forecast for next year by 11 per cent to Bt1.92 billion.

The securities firm warned that investors should be cautious on investing in TPIPL stock as it is quite risky due to its high involvement with politics as well as the pending court case.

However, TPIPL is fundamentally strong considering its financial status and high earnings before interest, tax, dividend, and amortisation of Bt4 billion-Bt5 billion. It is strong enough to service the debt burden from the fine of Bt6.93 billion in case the Supreme Court rules against Prachai.

An analyst from Seamico Securities said the TPIPL stock had already fallen by more than 37 per cent since the court verdict. Seamico believes the current stock price is due to an overreaction to the negative news. The current stock price is also lower than the adjusted book value of Bt9.51 for 2008. Seamico has revised the adjusted book value to Bt9.65, which is an upside gain of 16 per cent from the current price. It has therefore changed its recommendation from sell to buy.

Siriporn Chanjindamanee The Nation