Prachai Leophai-ratana

Prachai Leophai-ratana is a former senator and a Thai businessman who founded Thai Petrochemical Industry (TPI).

Prachai founded Thai Petrochemical Industry in 1978, based on companies his grandfather founded after World War II. Thai Petrochemical Industry (TPI) group began in rice milling, and had extended its business to gunnysacks, textiles, and insurance in the second generation. In 1979, the group consisted of nineteen firms still based mainly in agriculture-related sectors. The patriarch of this second generation, Pornchai Leophairatana, sent his sons to the US to study accounting, economics, and engineering. Returning to Thailand in the era when the economy was shifting decisively towards industry using newly found supplies of natural gas, Prachai Leophairatana and his five siblings launched the firm into cement and petrochemicals.

In the 1990s, Prachai expanded TPI with massive offshore loans to take advantage of the then interest rate gap between the Thai baht and US dollar. Most of the loans were not hedged because, as Prachai put it, "the Thai government had pledged the baht peg would be defended". The peg was around 25 baht to the US dollar. By the mid-1990s, TPI firms had expanded to forty-four and total revenues had multiplied twenty-five times. TPl had risen rapidly to second rank in the cement market, behind Siam Cement. It had also become a major player in the booming petrochemicals industry. By 1994, it had become Southeast Asia's first fully integrated petrochemical company. TPI invested in wharf and handling facilities on Thailand's eastern seaboard, built a 100-megawatt power plant, owned a cement company and opened its own gas stations.

The baht, however, proved vulnerable. Under speculative attack, its defences crumbled. The Thai currency was floated on 2 July 1997. By January 1998, the baht exchange rate had shot up to 56 to the US dollar. With TPI's total loans reaching US$3.8 billion, its creditors - led by Bangkok Bank - decided to get tough. In early-2000, Thailand's bankruptcy court approved the creditors' debt restructuring plan and appointed Australia-based Effective Planners as the plan administrator. The plan called for a debt-to-equity swap of US$756 million and the sale of non-core assets to raise US$200 million. Many thought that would spell the end of Prachai, who had effectively turned one of the region's largest petrochemical complexes into Thailand's biggest corporate debtor. But it didn't. Prachai refused to budge. He stayed on as TPI's chief executive and, for a while, even reported for work every morning. He also besieged the court by filing more than 35 different legal challenges against the plan and Effective Planners. The latter had to spend millions of dollars to fend off litigation. Although most of the lawsuits were dismissed, Prachai has always maintained he was not fighting for himself but for TPI and its workers. The workout plan slashed the Leophairatana family's stake in the company to 15 percent, down from 60 percent.

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