Stark Corporation, the SET-listed and financially troubled wire and cable manufacturer, has insisted it will not pay any debts until the company reaches agreements with every bondholder and creditor about the repayment methods.
Vonnarat Tangkaravakoon, acting chief executive and largest shareholder of Stark, said in a filing to the Stock Exchange of Thailand (SET) that negotiations are ongoing with all major financial creditors to reach an understanding on the firm's situation.
"The company plans to withhold the payment of any debts until a conclusion is reached on the method of managing the debt payments, which will be equally distributed to bondholders and other creditors," he said.
Mr Vonnarat's comment was in response to a notice dated June 20 by bond representatives of Stark's corporate bonds with a total outstanding principal of nearly 6.98 billion baht. The notice called for payment of all principal and accrued interest until the date the company has paid the bond debt in full, by July 20.
If Stark fails to pay such debt within the period specified in the demand notice, the bond representatives have the right to commence legal proceedings to request the company pay all outstanding debt under the bonds and claim damages for non-compliance with the terms and conditions, he said in the filing.
"As financial creditors other than the bondholders may accelerate their debt demands similarly to the bondholders, the company is negotiating for a solution where creditors refrain from exercising such rights, but talks are ongoing," said Mr Vonnarat.
He said Stark acknowledges there is a risk associated with any action that may be deemed as discriminatory or preferential for one group of creditors over any other creditors.
"The company believes it must take great caution in paying any debt to any group of creditors, as it could be revoked or adversely affect negotiations with the other creditors," said Mr Vonnarat.
