July 20 (Reuters) – A long-awaited consolidation of Thailand’s PTT (PTT.BK) group will not be on the agenda of board meetings to be held this week by its petrochemical and refinery affiliates, a senior official said on Tuesday.
The plan is widely expected to involve a merger between PTT Aromatics and Refining (PTTAR.BK) and IRPC (IRPC.BK) to create Asia’s eighth-largest oil refiner.
“The board will not consider the consolidation this week because management has to clarify some legal issues,” PTTAR Chief Executive Officer Chainoi Puankosom told Reuters.
A recent investigation by the national anti-graft agency on a case involving a rehabilitation plan for IRPC, formerly known as Thai Petrochemical Industry (TPI), was one issue the PTTAR board needed more time to consider, Chainoi said.
Last week, the National Anti-Corruption Commission voted that former Prime Minister Thaksin Shinawatra was wrong to endorse the Finance Ministry as an administrator for TPI’s rehabilitation plan in 2003.
TPI was Thailand’s largest corporate debt defaulter when it collapsed under a mountain of foreign debt during the 1997/1998 Asian economic crisis.
It was renamed IRPC in 2006 after the government had intervened in 2003 and PTT took control of it in late 2005 as part of the restructuring.
Last week, Chainoi said the PTTAR board would meet this week to consider legal issues related to the consolidation within the PTT group.
PTTAR, Thailand’s top integrated aromatics refinery, is nearly half owned by PTT, the country’s top energy firm. PTT owns 36 percent of IRPC.
PTT, PTTAR and IRPC held separate board meetings in late May, when the market had been expecting progress on the consolidation plan but was disappointed.
The consolidation of the petrochemical and refinery units — a move aimed at cutting costs and boosting efficiency — was originally supposed to take effect in November 2009 but was delayed by an environmental dispute at the huge Map Ta Phut industrial estate. [ID:nSGE617075]
At 0425 GMT, PTTAR shares were down 1.6 percent at 24.10 baht, while IRPC was unchanged. PTT rose 1.6 percent, while the main market .SETI was 0.7 percent higher. ($1 = 32.28 Baht) (Reporting by Pisit Changplayngam; Writing by Khettiya Jittapong; Editing by Alan Raybould)