Ministry seeks to unload stakes

Ministry seeks to unload stakes

Divestiture of holdings in some firms planned

The Finance Ministry wants to sell stakes in some state enterprises and state-backed firms to raise 100 billion baht towards their 720-billion-baht debt, which the ministry plans to move from those companies’ balance sheets to the government’s own.

The draft bill on fiscalising state enterprise debt incurred under previous governments’ policies lets the government use proceeds arising from shareholdings in state enterprises to pay the debt, Finance Minister Sommai Phasee said.

He said the government should divest itself of unnecessary stakes in state enterprises and private companies but declined to say which state enterprises would be targets.

As of last Sept 30, the Finance Ministry owned 51.11% of PTT Plc, 51.03% of Thai Airways International Plc, 70% of Airports of Thailand Plc, 65.8% of MCOT Plc, 26.02% of TMB Bank Plc, 9.98% of Bangchak Petroleum Plc, 13.81% of Padaeng Industry Plc, 16.67% of MFC Asset Management Plc and 20.45% of NEP Realty and Industry Plc.

The ministry held less than a 2% stake in Siam Commercial Bank Plc, Tisco Financial Group Plc, Tongkah Harbour Plc, Yarnapund Plc, IRPC Plc, PTT Exploration and Production Plc, Krungthai Bank Plc, Khonburi Sugar Plc, NFC Fertilizer Plc, True Corporation Plc and Italian-Thai Development Plc.

The bill will be submitted for approval by Mr Sommai and Deputy Prime Minister MR Pridiyathorn Devakula this month before heading to the cabinet in the next two months.

Other liabilities to be fiscalised under the new law include debt from the rice intervention schemes run by previous governments, a 63.2-billion-baht unpaid contribution to the Social Security Fund and debt shouldered by the State Railway of Thailand (SRT) and the Bangkok Mass Transit Authority (BMTA).

The subcommittee overseeing the accounting of rice subsidy schemes has estimated losses from 15 programmes from 2004-14 at 682 billion baht, with the Yingluck Shinawatra government alone responsible for 518 billion.

The loss-ridden SRT and BMTA had debts of 153 billion and 92.2 billion baht, respectively, at the end of fiscal 2014.

Mr Sommai said the bill would restructure the debt into a longer term of up to 20 years to allow greater flexibility.

The government has long resorted to bond issues to refinance debt, setting aside 61 billion baht a year on average from the annual budget to pay the principal. The bonds’ coupon rate averages 3.5%.

Under the fiscal-2016 budget bill, 200 billion baht will be set aside for debt payment.

Of that amount, 174 billion baht will be used for government debt and 26 billion for state enterprise debt.

The ratio of public debt to GDP fell to 43.3% at the end of March from 46.7% at the end of February.

This was due to an adjustment in the GDP calculation methodology by the National Economic and Social Development Board.

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