A liquidity crisis at Thailand’s largest construction company, Italian-Thai Development Plc (ITD), is causing concerns among investors, regulators, and rating agencies who are already on edge due to previous corporate scandals and debt defaults in the country.
Reports confirm that ITD is currently in discussions with banks to secure new loans to address the liquidity issues that have resulted in delayed payments to some workers and contractors. Following missed deadlines for submitting financial statements, trading of Italian-Thai’s shares was suspended as the company faces total liabilities of 108 billion baht, including bonds, loans, and trade credit as of September 30.
Over the past few years, ITD has experienced significant losses totaling around 6 billion baht from 2020 to 2022. Various factors, such as project delays and disruptions in countries like India, Taiwan, and Myanmar, due to political upheavals, have contributed to its financial struggles.
To alleviate the financial pressure, ITD is considering selling a mining unit and extending the maturity period of approximately 15 billion baht worth of bonds by two years. With shares plummeting since its high point in 2023, the company is also facing scrutiny from investors and financial institutions regarding its outstanding debts.
Industry analysts and officials, including Narongsak Plodmechai from SCB Asset Management and Pornanong Budsaratragoon from the Securities and Exchange Commission (SEC), are closely monitoring the situation. The SEC is intensifying oversight of bond issuers to safeguard payments and maintain investor trust amidst a challenging economic climate for high-yield debt in Thailand.
ITD’s financial challenges have prompted credit rating agency TRIS Rating to issue a negative alert on ITD’s rating, warning of a potential downgrade if the company’s financial position further deteriorates. The company’s major contracts with government agencies for infrastructure projects and historic ties to prominent families in Thailand add complexity to the ongoing situation.
The company’s president, Premchai Karnasuta, and other stakeholders, including Nijaporn Charanachitta, have also faced public scrutiny in the past. Premchai was previously convicted for wildlife poaching in a high-profile case, adding to the company’s challenges during this tumultuous period.
Photo credit: Pattarapong Chatpattarasill
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