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Published on February 22, 2008

Since the ailing gas distributor sought the mercy of the court last month, Krung Thai Asset Management (KTAM), which represents nine of its funds that had invested Bt1 billion in Picnic's bills of exchange, has been uneasy.

Teeraphan Jittalarn, KTAM's senior executive vice president, said on Wednesday that if the court gives the go-ahead to Picnic's debt-restructuring plan on March 17, KTAM risks seeing its remaining Bt300 million in the bills frozen for at least three to four years.

KTAM would appeal any of the court's rulings that allows Picnic to be off the hook as the result of the restructuring of its total debt of Bt6 billion.

The decision to appeal marks a U-turn for KTAM, whose CEO, Somchai Boonnamsiri, told The Nation's sister newspaper Krungthep Turakij last month that the reorganisation, with new shareholders, would be good for creditors.

The discontent was ignited when Picnic failed to answer KTAM's questions concerning the transfer of its entire stake in World Gas (Thailand) to a creditor. As of September 30, 2007, Picnic reported that it had long-term investment in World Gas valued at Bt1.61 million, according to the cost method.

Teeraphan said Picnic's debts to that particular creditor did not even exceed Bt100 million. However, the creditor was given shares worth Bt1.6 billion.

Teeraphan believes that World Gas, the cooking-gas leader with more than 12 per cent of the market - compared with Picnic's 8-per-cent share - should have commanded a higher value. Picnic acquired World Gas from SHV Holdings in 2004.

But Picnic's management told the press earlier that 70 per cent of World Gas's worth was "goodwill", meaning its brand value. Its directors and management were not available for comment.

The transfer pushed Picnic's shareholders' equity into the red by Bt1.25 billion, which will be favourable to Picnic when it comes to the court's decision-making process.

Picnic has successfully negotiated to have its outstanding payments cut by the majority of creditors, mostly banks. But half of the affected asset-management firms have decided to pursue the case.

"We have met, but haven't really decided on a concerted effort," Teeraphan said. Although KTAM could file both criminal and civil law suits against Picnic, if the appeal came about, Teeraphan said he would not specifically sue any director.

The Stock Exchange of Thailand on Wednesday insisted Picnic clarify World Gas's deal by next Monday, though the debtor earlier asked for a postponement, claiming that it would wait for the court's ruling.

"The SET considered that transferring the common shares of World Gas is a fact that was a significant transaction and already happened, thus Picnic has the ability to disclose the information as the SET required. Hence, the SET has still inquired into the disclosure from Picnic but Picnic did not cooperate with the SET," the bourse said.

Ki Nan Tsui

The Nation