ITD proceeds with Dawei project
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Italian-Thai Development Plc assured stock analysts at yesterday meeting that its investment in Dawei, Myanmar, is proceeding as planned. As part of the assurance, Japan International Cooperation Agency recently reiterated its intention to provide financi
"The company has the confidence to proceed with the project and it continues looking for new partners. It is over 50 per cent confident that the partnership issue would be finalised soon. Ital-Thai will then hold only 25 per cent in the massive investment project," said an analyst of Krungsri Securities.
The Thai construction company plans to sell some land for infrastructure development - like a power plant and industrial estate. It could also hold a stake in the infrastructure projects. Meanwhile, it will seek no equity partnership in the petrochemical, steel and fertiliser projects, which will also be located in the special economic zone. To the analysts, it also reported that the port and an outer ringroad are now near completion and that investment in Dawei should start some time in early 2014.
The analyst meeting, the first time in two years, was urgently hosted following rumours that Ital-Thai might be unable to proceed with the investment. In 2011, the company posted a net loss of Bt1.7 billion. In the first half of this year, it also reported a net loss of Bt259 million. Upon its assurance, Ital-Thai saw its share price increase by 2.04 per cent to Bt4, as of noon today.
The company also told analysts that its backlog is worth totally Bt200 billion, with half are projects under the bidding process.
Kiatnakin Securities noted that the value of awarded projects would rise to Bt130 billion once the company signs the Bt3.5 billion sixth contract for the Purple Line with the Mass Rapid Transit Authority of Thailand and the Bt24 billion second contract for the Red Line.
Ital-Thai also plans to reduce the stake in a potash mine in Udon Thani from 90 per cent to 50 per cent, to reduce debt. It has the policy to reduce the debt to equity ratio to 2.5 times, from 3.3 times at present.
Still, it said that recapitalisation would be the last option, to prevent a negative impact on shareholders.
