Bankruptcy law passes initial test - Thailand

Business Asia, April 5, 1999

Thailand's maligned bankruptcy law, recently amended under the suggestion of the International Monetary Fund (IMF), has stood its first test with the approval of a business reorganisation plan for Alphatec Electronics by the Civil Court of Thailand.

Owing US$360 million to more than 200 creditors and 1700 employees, Alphatec Electronics was one of the first major casualties of the Asian economic crisis in early 1997.

With the introduction of amendments to the Thai Bankruptcy Law in April 1998, Alphatec appointed Price Waterhouse Coopers (PWC) in June 1998 to develop a reorganisation plan for the company.

According to Mr Martin Brown, head of PWC's business recovery services in South Asia, the approval of the plan to restructure Alphatec saved more than a thousand job and export earnings for Thailand.

Approved by creditors representing 85 per cent of Alphatec's debt, the plan is based on a combination of asset sales, debt to equity conversion, and potential further recoveries from the ongoing performance of the business via the creation of a new entity.