Thai Oil8217;s debt plan intact despite fire

The accident had forced Thai Oil to declare a force majeure on refined oil products and on crude oil imports. The refiner did not specify how long the force majeure would stay in force.

Thai Oil chairman Surakiart Sathirathai told reporters:

quot;The debt plan has been approved by most creditors. Sowe don8217;t expect the accident will be a setback to the deal.quot;

Thai Oil protected from damages by insurance.

Thai Oil officials had initially estimated the damage to the plant from the fire at 13 million.

Masatsugu Nagato, general manager of the Industrial Bank of Japan IBJ and a member of a creditors8217; steering committee which drafted the debt plan, said that insurance companies would take care of the refiner8217;s damages arising from the fire.

quot;As far as Thai Oil8217;s financial cashflow problem is concerned, it is insured by its insurance policy,quot; he said. quot;Insurance companies will have to pay for the damage.quot;

Thai Oil has insured all of its assets, worth around 2.2 billion, with state-owned Dhipaya Insurance Plc.

Nagato said creditors would push on with the schedule of the company8217;s debt restructuring plan.

A group of creditors owning 75 percent of Thai Oil8217;s debt had approved the restructuring plan, a company official said late last month. Approval from owners of 75 percent of the debt wasnecessary to prevent the company from going into bankruptcy.

Nagato said more than 90 percent of the creditors who entered the debt negotiation sponsored by a central bank committee, had approved the debt plan.

quot;Thai Oil now is waiting to get the yes answer from all other lenders, who did not participate in the talks under the CDRAC the central bank8217;s committee,quot; he said. quot;Sooner or later they Thai Oil can get it.quot;Nagato said if all creditors agreed to the plan, the restructuring would start from the end of February.

Thai Oil runs a 220,000 barrels-per-day oil refinery capable of producing about a third of Thailand8217;s domestic refined products consumption, a Thai Oil statement said.

The refiner ran into severe financial difficulties in the wake of the Asian financial crisis because of a sharp fall in oil product demand, which hit refining margins.

It had suspended interest payments on loans since November 1998. Most of its creditors are Japanese banks.

INSIGHT :

Firedoused

A blaze at Thailand8217;s oil refinery, sparked by an explosion that killed five workers, has been extinguished after raging for 35 hours, Thai Oil Co officials said on Saturday. quot;The fire has subsided now but we have to continue surveillance for another one or two hours,quot; Thai Oil8217;s managing director Chulchit Bunyaketu told reporters at the company8217;s eastern Sri Racha refinery.

Local media had billed the fire as the worst in the Thai Oil sector8217;s history.

Firemen used vast quantities of protective foam to douse the blaze, which started on Thursday night, consuming four of nine storage tanks holding about 37 million litres of gasoline, company officials said.

Thousands of litres of the foam had been flown to the scene early on Saturday from Singapore in a Thai military aircraft after firefighters nearly ran out of the chemical.

quot;I am very glad that we have stopped the damage at four tanks,quot; Chulchit said. There were a total of 61.5 million litres in the nine tanks. Witnesses at the scenesaid that thick black smoke continued to billow from the burnt-out tanks at the 220,000 barrels-per-day refinery, but the fire was now completely out. A company spokesman Vacaharin Putapornpaisit said that inspectors were checking overall damage and the quality of the more than 20 million litres of gasoline remaining in the undamaged five storage tanks.It would take four to five weeks to declare the state of fitness of the undamaged tanks, she said.