Bloomberg News

ITV Asks Thai Government to Extend Payment Deadline

February 02, 2007

ITV Pcl (ITV), a Thai television network controlled by Singapore's Temasek Holdings Pte, said it appealed to the Thai government to extend a deadline for the payment of 98 billion baht ($2.8 billion) in fines and interest.

Thailand's Supreme Administrative Court on Dec. 13 ordered ITV to pay 2.2 billion baht in back fees plus interest and another 97.8 billion baht in fines by Jan. 29. The company has proposed paying off the back fees while the government has given ITV another 30 days to pay both.

``To pay 100 billion baht in 30 days is impossible -- it is a huge amount of money,'' ITV Chairman Niwattumrong Boonsongpaisan said today. ``If the prime minister does not accept our appeal we have to accept the consequences of having our license revoked.''

ITV, which has a 30-year concession to operate the only network of six in Thailand that's not owned by the government or the military, risks having its broadcast license revoked if it fails to pay within the extended deadline, Julayuth Hiranyawisit, permanent secretary at the Prime Minister's Office, said on Jan. 30. ITV and parent Shin Corp. were founded by former Prime Minister Thaksin Shinawatra, who was ousted in a coup Sept. 19.

ITV has 1.3 billion baht in cash and has found investors willing to buy new shares it plans to issue to help repay to back fees, Niwattumrong said at a news conference in Bangkok today. Still, the government's demand for the fine repayment and interest ``really scares away the investors we have been talking to.''

The fine should be paid after an arbitration tribunal decides about the dispute over the charge, Niwattumrong said. ITV had asked the arbitration tribunal to consider the disagreement over the fine, he said.

Proposal Rejected

The company's proposal last week to offer the government a controlling stake to offset the back fees, or to pay in installments, was rejected.

ITV has also offered to pay the 2.21 billion baht in 30 days, Niwattumrong said. Thailand's government sent ITV an official letter on Jan. 31, giving it 30 days to pay both the back fees and the 98 billion baht in fines and interest, he said. The 30-day deadline extension was granted after the company required more time to pay.

The broadcaster became profitable for the first time in 2004 after four years of losses, according to data compiled by Bloomberg. ITV posted record profit of 679.1 million baht in 2005.

The Prime Minister's Office is the government agency that grants television licenses. ITV was granted reduced concession fees and a cut in the number of hours it had to devote to news and educational programming by an arbitration panel about two years ago. Thai courts overturned the panel's decisions and ordered ITV to pay back fees and fines, and restore programming to 70 percent news and education.

Singapore's state-owned Temasek early last year led a group of investors in acquiring more than 96 percent of Shin Corp. from investors including Thaksin's family. The deal exacerbated protests and a political stalemate in Thailand that culminated in the coup.

To contact the reporters on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

To contact the editor responsible for this story: Tony Jordan at tjordan3@bloomberg.net.


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