Thai construction firm ITD seeks additional financial backing

Financially beleaguered construction company Italian-Thai Development (ITD) hopes to receive more financial backing from lenders to complete over 100 ongoing construction tasks while also vying for additional projects from the now active 2024 fiscal budget.

ITD, listed on the Stock Exchange of Thailand (SET), has plans in the pipeline to offload its non-performing assets, including Asia-Pacific Potash Corp. Meanwhile, a consortium of Thai-Chinese investors has shown interest in acquiring the infrastructure, ITD had invested in at Myanmar’s Dawei Special Economic Zone, according to executives’ statement yesterday.

Chatichai Chutima, senior deputy chief executive for finance at ITD, displayed a positive outlook as the company’s debenture holders consented to extend payments by two years for its five tranches of debentures that total more than 14 billion baht.

Debenture holders also agreed to ITD’s proposal to adjust the debt-to-equity ratio for the fiscal years 2023 to 2025 and permitted the company to commence debt restructuring discussions with banks, he added.

“We have secured some extra loans from banks and strongly believe that the ongoing negotiations will conclude favourably, allowing the company to sustain our operations.”

Chatichai refrained from revealing the amount ITD has sought from banks.

Debt restructuring

ITD’s shares have been on suspension on the SET since March 29, as the company’s auditor declined to express an opinion on the financial statements of the firm or has been unable to express confidence in them. This situation may trigger the need for an amendment according to the Securities and Exchange Commission’s requirements.

As per SET data, ITD’s total revenue last year stood at 64.5 billion baht, a decline from 67.8 billion baht in 2022, while net losses reduced to 1.07 billion baht from over 4.75 billion baht. Between 2020 and 2023, the contractor reported total losses exceeding 7 billion baht.

Once the leading contractor in Thailand by market capitalisation, ITD’s total liabilities approached 107 billion baht as of December 2023.

In mid-March, ITD disclosed that income from construction projects was inadequate to cover overall expenses and some employees had not received their full salaries. The contractor anticipates resolving the cash flow issue within two to three months.

Chatichai informed that ITD has been in talks with the Myanmar government after the latter expressed a desire to terminate the contract awarded to the Thai contractor in Dawei. A Thai construction firm and Chinese investors have exhibited interest in acquiring ITD’s assets and concessions there, reported Bangkok Post.

The company is also in the process of selecting a financial advisor for the sale of its potash mining project in Northeast Thailand.