Memo to CITIC: partnering with Prachai Leophairatana is not a good idea (news via FT):
…in a dramatic development in one of Asia’s longest running debt workouts, Beijing-backed Citic Resources on Thursday announced that it was in talks to buy Thai Petrochemical Industry through a joint venture with Prachai Leophairatana, founder of the troubled petrochemicals group.
In a statement, Citic Resources said its subsidiary, Citic Petrochemical, on May 30 signed a non-binding memorandum of understanding with Mr Prachai and other TPI shareholders regarding the acquisition of about 75 per cent of TPI’s existing issued share capital.
Getting into a joint venture with Prachai is asking for trouble. He is one of Southeast Asia’s most infamous businessmen. He delayed the restructuring of Thailand’s most indebted company for almost a decade, bullying creditors, debt-plan administrators and employing questionable legal tactics.
I covered TPI for a couple of years, during which time I was privy to a lot of dirt that I couldn’t report. I won’t describe it here as much of it is single-sourced and not fully substantiated.
However, to get an idea of what I’m talking about, consider this: I’m suggesting that a partnership between a Chinese investment company and a Thai magnate is a bad idea because one of the parties is of questionable ethics and will try to push the partner out at the first available oppportunity. ( believe it or not, it’s not the Chinese side.)
