Bangchak Petroleum, Thailand's state-owned marketer, distributor and refiner of oil and gas products, is considering raising up to Bt6 billion ($136.6 million) in the domestic debt markets. Bangchak will use the money to help reschedule its liabilities, currently standing at Bt23 billion.
The company has yet to mandate an arranger or lead manager for the transaction as it is awaiting approval for the proposal, to be decided at a general shareholders meeting on April 18.
Presently, Bangchak says it may issue a range of subordinated, unsecured and unsubordinated debentures with maturities of up to 10 years. It will look at market conditions to decide whether or not it issues in local or international currency.
If part of the issue takes the form of short-term paper - defined by the company as notes with less than 270-day maturities - when these are redeemed, the company will re-issue new debentures for the equivalent amount.
What is certain is that the debt markets offer the easiest route for the company to raise the money at this time. Issuing new equity would be a non-starter, as the company's stock value has plummeted from Bt40 per share in 1996 to the current level of Bt4.40. And with a debt-to-equity ratio of just 2.48%, analysts say that Bangchak is hardly suffering from over-exposure to the bond markets.
In addition, the poor share performance does not highlight improving overall performance by the company, whose sales rose by 35% year-on-year in 2000 to Bt52.1 billion.
