Body to ask Lewis & Peat to settle all contracts

Body to ask Lewis & Peat to settle all contracts

SINGAPORE (Dow Jones): The rubber trade associations of
Thailand, Indonesia, Malaysia and Singapore plan to ask the Lewis
& Peat group and its receivers to honor all outstanding
contracts, Thai Rubber Association president Choositt Ophaswongse
told Dow Jones Newswires Thursday.

TRA members had asked the association to look into the matter
for them, Choositt said.

The Lewis & Peat group, with operations in Connecticut, U.S.,
London and Singapore, ran into financial difficulties after its
chief creditor, Dutch-based Rabobank refused to roll over its
US$60 million short-term trading facility.

A big rubber dealer, it still has outstanding contracts with
suppliers that haven't been settled. Producers in Thailand,
Indonesia and Malaysia are worried about not being paid for their
rubber or not getting their rubber back, if they have already
shipped it to the group, said market sources.

Lewis & Peat's operations in UK and Singapore have been put on
sale by their receivers, international business services firm
Ernst & Young.

Its U.S. operations are negotiating with Rabobank to settle
financial claims for the division, which is currently under U.S.
Chapter 11 bankruptcy protection. Under the chapter, a company is
protected from its creditors while it reorganizes its finances
with the intention of staying in business.

At present, not all rubber contracts for January shipment have
been settled, said Choositt, confirming market talk on the issue.

Ernst & Young had been selective in the types of contracts to
honor, preferring those that are profitable, he said.

Choositt said the association is still surveying the extent of
losses that its members have incurred.

"We don't have the whole picture because some weren't willing
to disclose the figures," he said.

Choositt emphasized that the rubber trade associations will
need legal help in drafting their letter. He couldn't say when
the letter will be ready.

TRA, the Rubber Association of Indonesia or Gapkindo,
Malaysian Rubber Exchange and Rubber Trade Association of
Singapore will discuss the issue at the next ASEAN Rubber
Business Council meeting in Singapore on Feb. 19, he said. Asean
refers to the Association of Southeast Asian Nations.