Long judicial processes hinder Thai debt restructures

Author: Brian Yap | Published: 22 Oct 2015

Counsel in Thailand have called for a revamp of the country’s decades-old bankruptcy law to expedite in-court restructures, as authorities grapple with a resurgence of non-performing loans (NPL).       

Sahaviriya Steel Industries (SSI), one of Thailand’s largest steel manufacturers, has resorted to court-supervised debt restructuring after last month recording the country’s biggest loan default since the Asia financial crisis. 

But counsel have pointed to antiquated provisions on debt reorganisation under the Bankruptcy Act, and courts’ ability to decide on the timeframe for hearings which can lead to long restructuring proceedings.

"A fixed, legally-binding timeframe should be set on judicial reorganisation proceedings, so that distressed companies would be encouraged to enter into court-supervised reorganisation," said Pitchitpon Eammongkolchai, partner...