Prayut to chair meeting on THAI's fate

Prayut to chair meeting on THAI's fate

Shareholder restructuring likely at ailing flag carrier, but privatisation ruled out

The fate of Thai Airways International will be decided in a meeting chaired by Prime Minister Prayut Chan-o-cha next week. (Bangkok Post file photo)
The fate of Thai Airways International will be decided in a meeting chaired by Prime Minister Prayut Chan-o-cha next week. (Bangkok Post file photo)

The government will decide the fate of ailing Thai Airways International Plc (THAI) in a meeting of the State Enterprise Policy Commission next Wednesday, with the possibility of a shareholder restructuring to help the national carrier stay afloat.

The meeting will determine the condition and scope of rehabilitation for the national carrier, and will be chaired by Prime Minister Prayut Chan-o-cha.

To prepare for the final draft of the rehabilitation plan, Deputy Prime Minister Somkid Jatusripitak on Friday called urgent talks with Transport Minister Saksayam Chidchob and Finance Minister Uttama Savanayana to discuss the hotly contested issue — whether the flag carrier should maintain its status as a state enterprise under the Transport Ministry.

Mr Saksayam told reporters that the future share structure was not discussed at that meeting. He hinted that THAI executives had been tasked with drawing up plans on how they would resurrect the company from years of financial woes before the Wednesday meeting.

"Some issues are too sensitive to talk about now," Mr Saksayam said.

"I believe Mr Somkid and the finance minister have today seen the best way to keep the national aviation business healthy," said Mr Saksayam.

Declining faith in THAI has increasingly captured headlines, with Covid-19 battering the financially beleaguered airline, which has lost at least 12 billion baht in each of the past two years.

After the outbreak, the national carrier was forced to implement furloughs and slash salaries. There have been unsubstantiated reports that businesses with deep pockets could become substantial new shareholders.

To put those rumours to bed, Mr Somkid reportedly stepped in last Thursday by establishing an ad-hoc panel to find ways to rehabilitate the 60-year-old carrier amid a report that the Finance Ministry will have the Government Savings Bank and the Vayupak fund, with state-owned Krung Thai Bank as its major shareholder, acquire more shares in THAI.

As of now, the Ministry of Finance owns 51.03% of the shares, leaving 15.12% with the Vayupak 1 fund and 2.13% with the Government Savings Bank.

Deputy Transport Minister Thavorn Senniam said that one potential plan is to have the Finance Ministry reduce its share, allowing the Vayupak fund to increase its stake, said Mr Thavorn.

He said that with Vayupak fund as a major shareholder, THAI would be forced to operate more efficiently like other SET-listed companies.

Mr Thavorn ruled out rumours that private investors would become major shareholders.

"This direction is impossible as it tantamount to privatising the national carrier," he said.

Other options are requests for more funding, the issuance of corporate bonds or a capital increase, he said. Financial experts will know which path is best for THAI to prevent it from further losses, said Mr Thavorn.

He said only Gen Prayut's commission and the cabinet can decide on the shareholder issue, and regardless of the restructuring, THAI will survive.

"THAI will not collapse. The fact that Deputy Prime Minister Somkid stepped in to handle this issue means the government will rescue it," said Mr Thavorn.

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