Firms Offer Assistance, Banks Soft Loans: Thailand Flood

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CORPORATE FLOOD RELIEF

Firms offer assistance, banks soft loans

Business Reporters

The Nation

More soft loans and donations are being offered to aid flood victims after some companies have suspended production.

Deputy Finance Minister Viroon Tejapaibul said the Islamic Bank of Thailand would provide soft loans to support flood victim starting October 18 on Tuesday.

Existing borrowers will be allowed to suspend principal and interest (known as profit in the Islamic bank's practice) payments for up to three months, while new borrowers who want to repair homes or shops would be given grace periods of up to six months for principal repayment.

The repayment period is from one to 30 years.

Hitachi Group is providing support at a total value of 30 million yen (Bt11.4 million) to aid flood victims and assist in recovery efforts in the affected regions. In a statement released yesterday, the global electronics company expressed deep condolences for victims of the flooding, adding that it hoped for the earliest recovery of the people and areas in Thailand affected by the disaster.

Capital-markets organisations, led by the Stock Exchange of Thailand, are setting up a Bt500-million matching fund for flood rehabilitation.

The SET, the Federation of Thai Capital Market Organisations (FeTCO), the Association of Securi­ties Companies, the Association of Investment Management Compa­nies, and the Thai Listed Companies Association agreed late on Thursday that they would set up the fund.

The exchange agreed to inject half of the fund, pending the SET board of directors' approval, while the other three associations will mobilise the rest.

The fund will be presented to the government.

"After the water retreats, there will be huge need for rehabilitation," said FeTCO president Paiboon Nalinthrangkurn. "Initial damage is estimated at Bt100 billion, but this excludes damaged properties and damage to industrial estates. The losses are still being counted."

Mark Arnold, president and chief executive officer of Krungsri Group, said Bank of Ayudhya and its affiliates felt sympathy for customers and all people suffering from the floods in many areas, the most severe deluge Thailand has seen. Since the incident began, Krungsri has offered help by assessing problems and financial impact and launching several relief measures, he said.

Krungsri's detailed plan to provide relief during these tough times includes principal and interest holidays matched with tenure extensions. For large and medium-sized customers suffering direct impact, it will offer up to six-month principal grace periods and on a case-by-case basis lower interest rates. For customers in this segment suffering indirect impact. Krungsri will offer up to three-month principal grace periods and lower interest rates, again on a case-by-case basis.

For customers who also have significant collateral damage, Krungsri will provide additional financing where necessary to get the assets operational.

For retail customers, Krungsri will offer a combination of relief measures consisting of grace periods on principal repayment, interest reductions or interest waiver. In some cases it will offer, subject to Bank of Thailand approval, reduced minimum payments or suspend payments altogether for three to six months, depending on borrowers' needs.

"Our main focus is on the well-being of our customers and staff," Arnold said. "For Krungsri staff, the assistance includes earlier October salary payment, special financial aid for crisis relief and interest-free welfare loans.

"We will keep a close watch on the developments as the water continues to move and will be ready to provide further assistance to them during this period."

Inoue Rubber (Thailand), a manufacturer of rubber for auto parts, suspended its production in Wang Noi district, Ayutthaya, from Thursday as the main road to its facilities was closed, according to a regulatory filing yesterday. It has not yet set a reopening date.

On the same day, Rich Asia Steel suspended the service of its distribution centre in Wang Noi because of logistics problem after flooding on the Phaholyothin highway.

Sun Wood Industries reported yesterday that it had halted operations at Bang Sai, Ayutthaya, after flooding. Its subsidiary at Bang Pa-in in the same province, Longsan Veneer Co, also temporarily stopped production until the flood retreats.

Rockworth halted its Bang Pa-in operation from Wednesday as required by the Industrial Estate Authority of Thailand.

Also on Wednesday, Aapico Hitech, an auto-parts maker, suspended its plant in Hi-Tech Industrial Estate. The damage to its properties cannot be assessed at the moment.

Thai Central Chemical's second factory in Ayutthaya was suspended, while Quality Construction Pro­ducts, a maker of concrete products, said its plant in the province was closed as well.

-- The Nation 2011-10-15