K-Tech to seek bankruptcy protection after B977m loss
source: Bkk Post Apr 11 2008

K-Tech Construction will seek protection under the Central Bankruptcy Court after announcing net losses of 977 million baht for 2007. The construction company told the Stock Exchange of Thailand in a statement yesterday that directors on Tuesday had approved ''entering into rehabilitation in order to obtain protection [from creditors] and to prepare the rehabilitation plan for the debt restructuring under the Bankruptcy Act as soon as possible''.

K-Tech, best known for building some of Thailand's most luxurious hotels, is currently facing possible delisting from the SET due to its financial problems.

Its financial losses for 2007, equal to 2.11 baht per share, jumped sharply from losses of 18.35 million, or 0.04 baht per share, in 2006.

The SET said yesterday that shareholders' equity for K-Tech was negative 169 million baht, putting the firm in danger of delisting.

Auditors also issued a disclaimer on the company's 2007 financial statements due to the inability to ''obtain sufficient supporting evidence from the K-Tech management in the form of appropriate documentation and explanations with respect to the revision of construction terms, total estimated project revenue and costs.''

The SET said this had forced the company to reduce the amount due from customers for contract work and construction and installation contracts by 685 million baht for the year. K-Tech was also forced to set up allowances for trade accounts receivable and retention receivables of 149 million baht.

Auditors also had not received confirmation letters from K-Tech creditors representing obligations of 492.69 million baht, and noted ''the existence of material uncertainties which may cast significant doubt about the [company's] ability to continue''.

The SET noted that the Securities and Exchange Commission could force K-Tech to amend its 2007 financial statements due to the auditors' disclaimers.

Shares remained suspended yesterday with a notice pending (NP) attached in light of the potential delisting. The SET will review whether the company could be subject to delisting by April 22.

Shares of K-Tech, suspended from trade since last November for its failure to submit financial statements, last traded at 1.16 baht each. The company is trading just off its 12-month low, and over the past three months has fallen more than 28% in value compared with a 0.7% gain for the broad SET index.

K-Tech directors also announced the appointment of Porntat Amatavivadhana, a long-time investment banker, as a director. He replaced Suprangporn Thumsujrit. Donald Ian McBain was also named a director and audit committee member, replacing Michael Brian Sinkinson.

Established in 1997 by Norair ''Bob'' Der-Kevorkian, K-Tech listed on the SET in February 2004. Mr Der-Kevorkian died in 2005. His son Dominic is currently the managing director of the company.

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