Debt restructuring praised

Debt restructuring praised

BANGKOK (AFP): Thailand has struck the right balance between government intervention and private action in restructuring its corporate debt, reports said Saturday.

The chief regional counsel for Chase Manhattan Bank, John Knight, dismissed local criticism that the pace of debt restructuring was too slow.

"Here we are talking about a large number of companies in the economy that have gone insolvent, so the process is going to take time," Knight was quoted as saying by The Nation daily.

A large number of Thai businesses became insolvent when the regional economic crisis erupted here in mid-1997.

"Now it is truly the responsibility of the banks and shareholders to do their jobs in getting the deals closed," said Knight, who also sits on a debt restructuring committee set up by the Indonesian government.

But Knight added that the Thai crisis had revealed other weaknesses which also needed to be addressed. These ranged from underdeveloped legal and accounting practices to an ill-prepared government bureaucracy.