Bangkok is abuzz with discussions surrounding Italian-Thai Development Public Company Limited (ITD), a major player in the Thai construction contractor industry. This long-standing business, under the Karnasut family’s control for over six decades, boasts assets exceeding 100 billion baht (2.83 billion U.S. dollars), liabilities of a similar scale, and an annual revenue ranging between 50 to 60 billion baht (1.41 to 1.69 billion U.S. dollars).
Facing a challenging financial landscape, ITD has encountered liquidity issues, leaving them unable to meet obligations to subcontractors. Compounding this, a dearth of significant project bids, escalating interest rates, and impending bond payments of over 10 billion baht this year and the next have prompted the company to seek a two-year postponement through a bondholder vote.
Recent revelations from ITD acknowledge their prolonged struggle with liquidity problems, primarily stemming from overseas ventures like the Dawei project. With investments exceeding 7-10 billion baht, this initiative has faced setbacks due to uncertainties in Myanmar’s political and economic landscape.
Other ventures, including the potash mining project in Udon Thani province, have added to ITD’s woes in recent months, causing delays in payment schedules for construction sites. The company has altered its employee payment procedures, ceding control to major creditor banks, which now manage salaries and supplier payments directly upon receiving construction fees. Negotiations with these banks, ongoing for two months, aim to secure increased support and liquidity by the end of March.
In a letter dated February 29, 2024, ITD informed the Stock Exchange of Thailand, shareholders, and investors about the delay in submitting consolidated and separate financial statements for the year ended December 31, 2023. The company cited ongoing data processing and the need for additional auditor review time to ensure accuracy, completeness, and reliability. Consequently, ITD expects to submit the financial statements by March 29, 2024.
Italian-Thai, renowned for its involvement in major infrastructure projects, holds a significant presence in various sectors, including roads, expressways, bridges, electric trains, dual-track trains, high-speed trains, airports, and ports.
Insiders in the construction contractor industry warn that ITD’s predicament resembles a snake eating its own tail. The potential collapse could trigger a domino effect, compelling intervention from both the state and banks to avert catastrophic consequences. The unfolding financial challenges at ITD remain a focal point of industry analysis and speculation.
