G Steel Plc (GSTEEL), the financially troubled SET-listed hot-rolled steel producer, expects to conclude negotiations with its creditors in January next year.
In a filing to the Stock Exchange of Thailand yesterday, G Steel said 70% of its total liabilities have been restructured through haircuts, debt-to-equity conversion and debt deferral.
As of Sept 30, the company's liabilities stood at 23.6 billion baht, it said in a separate statement sent to the SET.
"A commercial bank is willing to provide working capital worth about 1.6 billion baht to procure raw materials. Besides, the company and subsidiary G J Steel (GJS) have been confirmed from major business alliances to provide additional working capital of 8 billion baht to procure raw materials," director Ryuzo Ogino said in the statement.
G Steel also expects to raise registered capital in January, as the board has called for the first round of capital increase for 1.35 billion shares priced at 40 satang apiece or a total of 540 million baht.
Proceeds will be used as additional working capital for production.
An extraordinary shareholders' meeting in early August agreed to issue 2.4 billion new shares to existing shareholders through right offerings.
"The company's board has resolved to propose to the first shareholders' meeting next year, to be held on Jan 7, to subscribe to new ordinary shares of GJS at no more than 28.5 billion shares at eight satang each to maintain current ownership as well as management control via a debt-to-equity conversion or cash injection at a later stage."
The new capital increase is expected to be completed in January, generating 2.7 billion baht for GJS.
Of the amount, 1.27 billion baht will be used to repay debt and 1.8 billion baht as working capital.
In the third quarter, G Steel posted a net profit of 250 million baht compared with a net loss of 836 million in the same period last year.
For the nine-month period, the net loss was 2 billion baht compared with a loss of 1.6 billion in the same period last year.
G Steel is in the process of hiring a "world-class" professional company with specialised knowledge and capability in turning around the company's operation.
GSTEEL shares were suspended yesterday after its auditor was unable to express confidence in the company's financial statements for the period ending Sept 30.
The shares last traded on Wednesday, closing at 33 satang.
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