The guarantee is worth THB1.78 billion.
Maybank Kim Eng reported that the Central Administrative Court dismissed an injunction request by cash-strapped Thai TV Co to protect its bank guarantee from being seized by the National Broadcasting and Telecommunications Commission (NBTC).
After the dismissal, NBCT's broadcasting committee sent a letter to notify Bangkok Bank, the issuer of Thai TV's bank guarantee, to pay THB1.78b on behalf of the ailing digital TV company.
Here's more from Maybank Kim Eng:
The lawyer for Thai TV reaffirmed that Thai TV has the right to refuse making the payment and insisted that Thai TV will wait for the final decision from the court on this dispute, which will take some time in our view.
BBL also said that the bank could not pay the guarantee unless there was permission from Thai TV or an order from the court.
We reiterate that this case should not significantly affect the bank’s earnings this year. BBL is confident that if the bank has to convert the guarantee into loans, Thai TV’s owner Ms. Pantipa Sukulchai has strongfinancial standing and is likely to service her debts.
But in the worst case that the loans turn into NPLs forcing the bank to set aside provisions, the net profit will be reduced by 3.6% from our base case. We note that this issue has been going on for some time and the bank may already have set aside provisions, which means it will not affect earnings this year at all.
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