Creditors of Alphatec, the Thai electronics company faced with bankruptcy, are today being presented with a revised restructuring plan which is aimed at meeting the concerns of major creditors who on Monday refused to accept the initial plan put forward by PriceWaterhouseCoopers. Under the plan, US financial services company AIG together with Investment AB, the parent of Swedish telecom firm Ericsson, would invest $40m for an 80% share of a new offshore holding firm. The remaining 20% would be held by Alphatec creditors through a debt-for-equity swap. The holding company would establish a local subsidiary to manage Alphatec assets. The main change in the revised plan calls for the new Thai company to swap subordinated debt for the assets, effectively making Alphatec a creditor of the new firm. It is hoped this will address the concerns of Krung Thai Bank and Union Bank of Bangkok, which control a combined 26% of Alphatec’s $363m debt, and who refused to pass the earlier plan because they maintained creditors would lack legal protection if the two new investors chose to liquidate assets. The overall level of debt would be written down to $104m through the restructuring. Alphatec, which makes integrated circuit packaging and other electronic equipment, has said that it only has enough funds to survive until the end of this year and so a bailout is of the utmost urgency. Also adding to the urgency is the fact that its assets have been shrinking rapidly because of the recession with the Thai press quoting an unnamed company executive as saying a book value of $78m as recently as June has now slipped to just $30m. Creditors are not expected to vote on the new plan until mid-January, however, by which time the company will be in even deeper trouble. Nevertheless, Alphatec president Willem de Vries says, although the company is in serious difficulties, recovery is possible if the revised plan is accepted and speedily implemented. We are committed to saving the jobs of our 1,750 employees as well as the preservation of business with our customers. The business plan going forward is strong and viable – one that will bring substantial returns to shareholders in the future, he said.
