Ailing Pan Asia looks to revival

Pan Asia Footwear has tried to restructure by selling some assets, downsizing, and negotiating with Bangkok Commercial Asset Management (BAM) to restructure its debt, according to the company’s report to the Stock Exchange of Thailand yesterday.

Pan Asia Footwear managing director Sommat Khunset reported to the SET that the company had continued to show operational losses and lack of financial liquidity since last year when Nike shifted its manufacturing sources from Thailand to China and Vietnam. As a result, Pan Asia and its subsidiaries saw sales decline from Bt5.23 billion to Bt2.98 billion for a gross loss of Bt472 million in 2010. The company and its subsidiaries had a net loss of Bt601 million that year.

In 2011, sales increased by Bt616 million from Bt2.98 billion in the previous year to Bt3.59 billion. The company was still experiencing losses, but they had decreased. 

In addition, the company and its subsidiaries had operating losses due to declining sales from the years before 2012, totalling Bt992 million.

In the first six months of this year, the company and its subsidiaries enjoyed a total net profit of Bt45.26 million, mainly from the sale of property worth Bt490.47 million. 

However, if the gains from the sale of the property are excluded, the net loss would be Bt445.21 million.

From the company financial problem, operating result and financial liquidity of the company to prevent the company from being delisted. The company has reduced the size of its group, cutting the number of employees and discontinuing operations of poorly performing subsidiaries, and selling off non-core assets. 

A debt-restructuring plan is being negotiated with BAM. The company has restructured itself into a holding company, under which its wholly owned subsidiary WBLP Co manufactures shoes and bags, primarily for the domestic market.