A borrowing spree by Thai billionaire Dhanin Chearavanont that raised debt to almost six times equity is adding to mounting corporate liabilities and reviving memories of the 1997 Asian crisis.

Dhanin’s CP All Pcl (CPALL), operator of 7-Eleven stores, has increased total debt to 5.8 times equity as of Sept. 30 from zero two years ago, data compiled by Bloomberg show. The number of Thai companies with debt more than double equity has risen to 53 out of 620 from 42 in 2007.

Standard & Poor’s says that, while a crisis isn’t imminent, overstretched Thai borrowers have become more susceptible to downturns as global economic growth falters. The region has also protected itself by developing local debt markets since Southeast Asian banks and property developers struggled to meet overseas borrowings in the 1997 crisis.

“We believe Thai companies haven’t been tested under very stressed conditions, especially with their current higher debt load,” said Xavier Jean, a Singapore-based analyst at S&P. “We haven’t seen the full impact of rising interest rates and the macroeconomic headwinds in the region and China.”

(Bloomberg)