Thai Petroleum Industry (TPI) staff protest foreign creditors' plan

Before noon more than 4,000 TPI employees attempted to enter a creditors' conference room at the Queen Sirikit National Convention Centre in Bangkok, forcing them to abruptly call off the meeting and move it to the Legal Execution Department of the Justice Ministry.

Talks on the rehabilitation scheme were scheduled to continue at the new venue Thursday afternoon. The fate of TPI, the country's largest corporate debtor with more than 3.2 billion dollars owed to a host of foreign and domestic banks, has been seen as a bellwether for Thailand's corporate restructuring process following the financial crisis of 1997.

In March this year Thailand's Central Bankruptcy Court ordered TPI to restructure its 3.2 billion dollar debt according to a majority-approved creditors plan, overruling the opposition by the company's founder and chief executive officer Prachai Leopairatana.

The court's ruling in the creditors' favour was deemed a positive development for Thailand's bankruptcy procedures. But the latest restructuring plan for TPI, drafted by the creditors' Effective Planners executive team, has prompted protests by the company's employees.

"We will be satisfied if the Effective Planners promise not to lay employees off, not to cut our salaries and not to sell core assets," said TPI vice managing director Somboon Wangsupachart, the leader of the TPI protesters.

A spokesman for the Effective Planners team - which represents major creditors such as the Bangkok Bank, International Finance Corp, the U.S. Export-Import Bank, Bank of America, Citibank and KFW of Germany - said it would be difficult to restructure the company's debt without selling off some core assets.

"The TPI Group's debts are very large, and there are only a certain number of ways by which they can be reduced to a sensible level," said Effective Planners' managing director Anthony Norman. He added, "The sale of non-core assets is one such way. A crucial part of (our) plan is that 200 million dollars be raised in this way by the end of 2001."

Norman promised that there was no plan to lay off employees and cut salaries, although this promise was not written into their restructuring plan. The Effective Planners high salaries have also drawn flak from the TPI protesters.

"This small number of consultants are getting 140 million baht (3.2 million dollars) in salaries per month, whereas the salaries for the entire TPI staff of 10,000 amounts to 150 million per month," said Somboon.

Prachai, who has repeatedly opposed the creditors' plans for restructuring his business empire, is widely believed to be behind the TPI employees strike, although he has denied it. Prachai, has expressed is opposition to plans to sell off core assets, such as a power plant.

"Prachai has to accept that he is deeply in debt," said Siphanonda Kettutad, a senior member of the Effective Planners executive committee. "And he has guaranteed all this debt." Prachai's refusal to accept the creditors' first rehabilitation scheme that took two years to hash out forced them to take the case to Thailand new bankruptcy court earlier this year.

The Leopairatana family is one of country's well-established Sino-Thai business clans, which originally made its fortune in rice milling and commodity exports, before diversifying into the petrochemical industry in the early 1980s, and later into cement and steel production

(la/dpa)