Debt restructuring vital to avoid delisting, Stark director says

The company has outlined four approaches: negotiation with creditors, asset sales, capital increase, and filing a petition for court-supervised rehabilitation to restore business operations and restructure debt. A shareholder meeting has been scheduled for July 19.

Board member and major shareholder Wannarat Tangukun reported to the Stock Exchange of Thailand (SET) on June 28 in relation to the company's audited financial statements for fiscal 2023 which showed negative shareholder equity that would subject the company to being delisted from the Thai bourse. Wannarat said the company is not taking this matter lightly and will take action promptly to address the problem. The company intends to restructure its capital and debt, both of the company and its subsidiaries, in order to increase the value of shareholders' equity and generate net profits from the regular operations of the subsidiaries. The company is currently considering the following approaches:

1. Negotiating with all significant creditors to suspend the exercise of their right to demand immediate debt repayment, providing financial support for the company's capital and debt restructuring plan, including financial assistance for debt repayment and business planning in both the short and long terms.

2. Sell off assets such as shares in subsidiaries that are not engaged in the company's main business and important contractual rights, and adjust the organisational structure to align with the business volume to increase revenue and reduce fixed costs and expenses of the company.

3. Increase the registered capital to allocate additional common shares to existing shareholders or consider new investors to increase the shareholding and improve the financial position of the company.

4. File a petition for court-supervised rehabilitation to restore business operations and restructure the company's capital and debt, including the right to convert debt into equity for creditors under the business rehabilitation plan.

In considering the options to address the negative shareholders' equity, the company will take into account various factors, including conditions and restrictions under financial agreements, significant contracts, market demand for the acquisition of the company's assets, and relevant pricing factors.

The cooperation and support of relevant creditors, the support provided by the existing shareholders of the company, and various measures to maintain the registered status of the company and preserve the maximum benefits of the company, shareholders, and all stakeholders are of utmost importance.

The current Board of Directors and management of the company are fully committed to addressing these issues in order to minimise the impact on all parties involved, within the framework of applicable laws and regulations. The company will inform shareholders and investors of the proposed course of action to address the potential revocation of registered securities and the timeline for these actions by July 19.

Stark Corporation is a wire and cable manufacturing company, listed on the Stock Exchange of Thailand (SET), and suspected of fraud by its former executives who allegedly tried to hide the company’s accumulated loss during 2021-2022 of 12 billion baht, 4 billion of which is reportedly negative shareholder equity.

The issue came to light after Stark Corporation failed to submit its financial statements within the deadline required by law.