A creditor meeting to consider the business rehabilitation plan of Energy Earth Plc (EARTH) is scheduled for Aug 2 after the Central Bankruptcy Court ordered a reclassification for Kasikornbank (KBank), with a principal amount of 825 million baht as a secured creditor.
"On May 15, the Central Bankruptcy Court issued an order to reclassify Creditor No.2196 as a secured creditor with the principal amount of 825 million baht," EY Corporate Advisory Services said in a filing with the Stock Exchange of Thailand. "The remaining debt [involves] unsecured financial institution creditors and creditors issuing letters of guarantee."
EY Corporate is Energy Earth's planner.
The creditor meeting was delayed from April 30 after KBank filed a petition to reclassify the company's debt owed to the bank.
Payong Srivanich, chief executive of Krungthai Bank (KTB), said the Securities and Exchange Commission (SEC) charge against Energy Earth would be a boon to the company's rehabilitation process.
Energy Earth owes 12 billion baht in principal and interest to KTB. Other bank creditors are Kasikornbank, Bank of Ayudhya and the Export-Import Bank of Thailand.
On Wednesday, the SEC accused Energy Earth of falsifying information or withholding important details on its increased debt worth 26 billion baht.
"Earlier, the bank found some irregularities, which might be the same as what the SEC found, and those irregularities have led the company to enter business rehabilitation," Mr Payong said.
Energy Earth entered financial straits after failing to redeem two lots of bills of exchange (B/Es) worth 90 million baht that were due in June 2017. At the time it said the firm's cash flow had been squeezed after its overdraft line of credit was halted.
The company's financial problems snowballed when a raft of its B/Es defaulted, triggering cross-default debentures worth 5.5 billion baht, compounded by the failure to seek fresh sources of funding from financial institutions.
Mr Payong said KTB would maintain loan-loss provisions in the second quarter at an amount equal to previous quarters. But the bank's non-performing loan (NPL) ratio had already peaked by that time.
KTB, the country's fourth-largest lender by assets, saw its bad-loan ratio climb to 4.33% of outstanding loans at the end of March from 4.19% at the end of 2017.
Mr Payong said the bank's loan growth will decline in the short term after falling in the first five months, but he added that the bank aims for loan growth of 6-7% for the full year.
