Financially ailing Stark Corporation is considering filing for court-supervised capital and debt restructuring, divesting shares in non-core subsidiaries, and increasing registered capital in order to retain its status as a listed company.
The announcement was made days before shares of the listed wire and cable manufacturer, which has been investigated by the Department of Special Investigation for alleged fraud, would be suspended from trading.
The Stock Exchange of Thailand (SET) confirmed yesterday the SP (suspension) sign would be posted on Stark's securities from July 1, until the company is able to eliminate the grounds for delisting as shareholder equity is negative.
As Stark's negative shareholder equity in 2021 and 2022 constitutes grounds for delisting under the SET regulations, the company plans to urgently take action to remove the suspension, acting chief executive and director Vonnarat Tangkaravakoon said in a filing to the bourse.
"Stark intends to restructure the capital and debt structures of both the company and its subsidiaries, which operate the core business, in order to make our shareholders' equity greater than zero and generate net profits from normal operations of the subsidiaries in the core business," he said.
Under this strategy, Stark is considering filing a petition with the Bankruptcy Court for business reorganisation to restructure the company's capital and debts, including providing the option of debt-to-equity conversion rights to creditors, said Mr Vonnarat.
The company's assets, such as shares in non-core subsidiaries or those without the right of claims under significant contracts, would be potentially divested while Stark reorganises the business structure in line with volume to increase revenue and reduce fixed costs and expenses, he said.
Another move would involve increasing the registered capital to allocate newly issued ordinary shares to existing shareholders, or "seeking new investors in order to increase shareholders' equity and the company's financial liquidity", said Mr Vonnarat.
Stark will negotiate with all major creditors so that they refrain from exercising the right to accelerate their debt payments, supporting the company's capital and debt restructuring plans, including the provision of financial assistance, for managing debt payments and business planning both in the short and long term, he said.
"The board of directors and management are committed to eliminating the grounds for delisting, in accordance with the applicable laws and relevant regulations, to minimise the impact on all concerned parties," said Mr Vonnarat.
The process to eliminate the grounds for delisting and the timeline of implementation would be disclosed to shareholders and investors by July 19, he said.