By an OGJ correspondent
BANGKOK, Jan.14 -- Thailand's first lube base oil producing plant, owned by Thai Lube Base Co (TLB), is to reopen next month after a 2-year closure due to financial troubles.
The proposed reopening follows successful completion of TLB's $200 million debt restructuring plan, according to PTT PLC, a major shareholder.
Creditors agreed to slash TLB's debt to $60 million from $220 million after the company settled its legal disputes with the Thai Excise Department, which had accused the firm of tax evasion and had demanded retroactive tax payments of $93 million.
That dispute resulted from conflicting definitions of TLB's business. The company claimed it functioned as a refinery, but tax officials used a different classification that subjected the firm to higher tax rates.
Under the settlement, the company received a tax waiver on its crude imports and is subject to 5% excise tax on its wholesale value with no retroactive payment. That settlement cleared the last hurdle to the company's debt restructuring.
Under the restructuring plan, Thai Oil Co. is reducing its interest in TLB to 1% from 38%, while PTT is increasing to 38% from 30%. Other shareholders remain unchanged including by Nippon Mitsubishi Oil 22%, BP Oil 5%, Siam Lubricam Industry 3%, and Thai Petroleum Oil 2%.
The TLB plant has a production capacity of 300 million l./year of lube oil and 350 million l./year of bitumen.
The only other local lube base oil plant is operated by Thai Petrochemical Industry PLC.