The Securities and Exchange Commission (SEC) has issued guidelines for investors as Stark Corporation faces the possibility of defaulting on bond payments worth nearly 9.2 billion baht. The SEC has emphasised that investing in debt securities carries high risks and that investors could lose both principal and interest.

 

The guidelines aim to clarify the roles and functions of bond representatives in protecting investors’ rights and interests in the event of a default. Tayakorn Jitrakuldhacha, director of the SEC bond department, highlighted that a major risk for bond investment is the default, which occurs when the issuer is unable to pay the principal or interest as scheduled.

 

Bondholders have representatives for each generation of holders, responsible for demanding payment of mandatory collateral and claims for damages to bondholders. They also provide various information to investors. In Stark’s case, the bondholders’ meeting on May 31 called for a call default of two debenture series worth 2.24 billion baht, making it highly unlikely that Stark will be able to pay three other bond series with a total outstanding value of around 6.96 billion baht.

 

The bondholders’ representative may need to hold a bondholders’ meeting to seek approval for various actions, such as requesting an extension of the repayment period or suing for compulsory payment or collateral. The SEC advises bondholders to monitor news from bondholder representatives and attend bondholder meetings to protect their interests.

 

By Alex Morgan

Top photo caption: Securities and Exchange Commission, Image via Chaiyaphum Siripanpornchana, Google Maps

 

Full Story: https://thethaiger.com/news/business/sec-offers-guidance-for-investors-amid-starks-potential-bond-default

 

-- © Copyright Thaiger 2023-06-08

 

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The big question is, How much of investors money will be given back during any future bankruptcy proceedings?.  Will they be the first creditors to obtain monies or the last.  A bond default is pretty serious business.  Time to open the books and be investigated.