G Steel has a new debt-to-equity conversion scheme for creditors to reduce the company’s massive liabilities.
SET-listed G Steel Plc plans to exercise a debt-to-equity conversion scheme for its debt of 9.28 billion baht to eight creditors to reduce the company’s massive liabilities worth 18.83 billion baht.
The scheme will be on the agenda at the extraordinary general meeting of shareholders on Oct 11. G Steel’s debt restructuring plan aims to reach a debtto-equity price of 0.19 baht per share.
At present, the Stock Exchange of Thailand has suspension (SP) and non-compliance (NC) signs on GSTEEL because the company failed to submit financial statements within specified deadlines.
The SP and NC signs have been applied since May 16.
Soontareeya Wongsirikul, director of G Steel, said the company wants to be listed on the stock market and continues to produce and distribute hot-rolled coil steel in the country.
“G Steel expects to resume normal trade on the stock market by December,” she said.
This debt restructuring plan is expected to change G Steel’s debt-toequity ratio from -4.89 times to 1.79 times.
Ms Soontareeya said G Steel filed for bankruptcy with a debt restructuring plan to pay back 17 billion baht to creditors.
She said G Steel has spent roughly nine years sorting out its financial status after suffering from the subprime crisis in 2008. Major shareholders agreed on the debt restructuring plan and filed the bankruptcy with the court.
“Global steel prices have gradually fallen from US$800 per tonne in the past couple of years to only $280 now. This is the main reason G Steel has such a high level of debt,” Ms Soontareeya said.
G Steel produces raw materials for downstream industries such as coldrolled coils, galvanised steel, steel pipes, structural steel products for construction, LPG containers, auto parts, home appliances and steel furniture.
She said G Steel has capacity for hot-rolled coils of 110,000 tonnes per month, 65,000 tonnes of which serve the local market.
In 2020, G Steel plans to increase its high value-added products to serve the pipeline gas business, said Ms Soontareeya.
“G Steel is in talks with Japanese companies to develop these steel products,” she said. “The high value-added products will represent 10% of total capacity next year, with an expectation of a higher margin of 2,000 baht per tonne.”
At present, G Steel makes only commodity-grade products.
Ms Soontareeya expects 2020 sales to reach roughly 11-12 billion baht for the new steel product. G Steel projects global steel prices will increase to support the market.
In 2019, G Steel expects total sales of 4 billion baht.
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The drop in global steel prices is the main reason G Steel has such a high level of debt.
SOONTAREEYA WONGSIRIKUL Director, G Steel