Within the Thai construction contractor industry, Italian-Thai Development Public Company Limited (ITD) has become a focal point of discussions due to its financial challenges. The company, managed by the Karnasut family and involved in both domestic and international mega-projects for over 60 years, grapples with cash flow issues. With assets and liabilities each exceeding 100 billion baht and annual revenue ranging from 50 to 60 billion baht, ITD is encountering difficulties meeting financial obligations, especially to subcontractors.
Facing a confluence of factors including a dearth of major project bids, escalating interest rates, and upcoming bond payments exceeding 10 billion baht in the current and following year, ITD has sought bondholders’ approval to defer payments for two years.
ITD has acknowledged prolonged liquidity challenges, primarily stemming from stalled overseas ventures like the Dawei project, where significant investments have yielded minimal progress due to the uncertain political and economic landscape in Myanmar. Additionally, endeavors like the potash mining project in Udon Thani province have added to the company’s woes, leading to delays in payments at certain construction sites.
To manage financial strains, ITD has restructured its payment procedures, with major banks overseeing financial matters, including salaries and supplier payments. Discussions with creditors, including the banks, have been ongoing for two months to secure support and enhance liquidity, with expectations to finalize agreements by the end of March.
In a recent update to the Stock Exchange of Thailand, shareholders, and investors on February 29, 2024, ITD notified of a delay in submitting the financial statements for the year ended December 31, 2023, citing additional processing and review time required to ensure accuracy, completeness, and reliability. The company aims to submit the statements by March 29, 2024.
As a prominent player in the construction sector, ITD is known for a diverse portfolio encompassing roads, bridges, electric trains, airports, and other key infrastructure projects. Analysts within the industry note that ITD’s predicament has wider implications, potentially triggering a chain reaction if left unaddressed. Anticipating intervention from banking institutions and government agencies to prevent a collapse, ITD’s situation underscores the critical role the company plays in the sector and the broader economy.
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