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China International Trust & Investment Corp, China's leading investment arm, has announced it is in talks to acquire 75 percent of Thai Petrochemical Industry Pcl, which has a market value of about US$2.7 billion.
CITIC Resources Holdings Ltd, the company's mining unit, said it signed a non-binding agreement on May 30 with shareholders of Thai Petrochemical, the nation's largest listed petrochemical maker by sales. Both sides will conduct talks on an exclusive basis, the Chinese company said in a statement yesterday.
Thai Petrochemical, managed by the finance ministry since 2003 under a bankruptcy court order, needs to reduce its US$2.7 billion debt. Bangkok Bank, Citigroup Inc and other creditors have been battling for control of the company with founder Prachai Leophairatana for eight years.
CITIC Resources' entry may hamper an agreement reached Thursday with PTT Pcl, Thailand's biggest energy company, which agreed to buy 31.5 percent of Thai Petrochemical. The Thai Government Pension Fund, Vayupak Fund and Government Savings Bank also plan to buy stakes of 10 percent each under a reorganization deal arranged by the finance ministry.
The agreements signed by the Thai investors would allow them to acquire existing shares and new shares, representing 90 percent of Thai Petrochemical's enlarged capital. The stake sales to Thai investors "will not proceed" should CITIC Resources successfully conclude its planned purchase, the Chinese company said yesterday.
"The proposed transaction will avoid the issue of new shares by Thai Petrochemical at a price significantly below trading prices," CITIC Resources said.
Prachai tried last week to stop share sales to the Thai investors. He told reporters on May 26 that he received loan pledges totalling US$2.7 billion from CITIC and two other overseas companies to pay off all of the debt.
Profit at Thai Petrochemical was 12.3 billion baht (US$302 million) in 2004, a five-fold increase on the previous year, CITIC Resources said.
"The company plans to invest in natural resources such as petroleum of which China is a net importer," CITIC Resources said in the statement.
China's crude oil imports last year rose 35 percent to 120 million metric tons, the General Administration of Customs of China said on January 12.
CITIC Resources' plan to takeover Thai Petrochemical will need approval from Thailand's Central Bankruptcy Court, the statement said. Shares of CITIC Resources, suspended since May 26, resumed trading yesterday.
(Xinhua News Agency June 3, 2005)
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