All Inspire Development sparks concern with default on interest payment for bonds
A major property developer has informed the Stock Exchange of Thailand that it has defaulted on 10.65 million baht in interest payments on a tranche of bonds, raising concerns about its ability to repay debentures of 1.2 billion baht due this year.
All Inspire Development Plc (ALL) reported that it defaulted on the fifth interest payment of 10.65 million baht for its ALL244A bonds, saying it lacked liquidity.
The 709.90 million baht worth of bonds were issued on October 1, 2021 with a due date in April 2024.
Somjin Sornpaisarn, managing director of the Thai Bond Market Association, said the property company had informed the bond association that a cash crunch caused it to default on the payment.
Somjin said representatives of ALL244A bond holders had yet to schedule a meeting to decide what to do about the default. The amount of the default is far lower than the minimum set by legislation – 400 million baht – for bond holders to take legal action against issuers.
According to the bond association, All Inspire Development raised 2.334 billion baht in seven tranches of bonds, with 1.205 billion baht worth of bonds being due this year.
The company issued bonds worth 80.7 million baht in October last year.
Amonthep Chawla, head of research at CIMB Thai Bank, said the default by the property developer would not affect the overall bond market because the problem was specific to one company.
Amorthep said All Inspire Development suffered from a liquidity crunch because it failed to raise more funds by issuing new shares.
Kitpon Praipaisarnkit, vice president of brokerage firm UOB Kay Hian, said the default was quite worrying because it demonstrated that the company’s cash shortage was severe.
Kitpon said companies can issue new shares or use funds from savings and operations to pay interest on bonds. As a result, it is concerning that All Inspire Development cannot pay interest on its bonds, he said.
The company may not be able to honour its 1.2 billion baht worth of bonds due this year, he said.
According to the bond association, All Inspire Development had raised 2.334 billion baht in seven tranches of bonds, with 1.205 billion baht worth of bonds being due this year.
The company issued bonds worth 80.7 million baht in October last year.
Amonthep Chawla, head of research at CIMB Thai Bank, said the default by the property developer would not affect the overall bond market because the problem was specific to one company.
Amorthep said All Inspire Development suffered from a liquidity crunch because it failed to raise more funds by issuing new shares.
Kitpon Praipaisarnkit, vice president of brokerage firm UOB Kay Hian, said the default was quite worrying because it demonstrated that the company’s cash shortage was severe.
Kitpon said companies can issue new shares or use funds from savings and operations to pay interest on bonds. As a result, it is concerning that All Inspire Development cannot pay interest on its bonds, he said.
The company may not be able to honour its 1.2 billion baht worth of bonds due this year, he said.
