Thai Airways on verge of B54bn loan

Thai Airways on verge of B54bn loan

Thai Airways International needs a 54-billion-baht short-term loan for use as working capital. (Bangkok Post photo)
Thai Airways International needs a 54-billion-baht short-term loan for use as working capital. (Bangkok Post photo)

The Public Debt Management Office (PDMO) is poised to secure a 54-billion-baht short-term loan for Thai Airways International Plc (THAI) for use as working capital if the cabinet approves its rehab plan.

PDMO director-general Patricia Mongkhonvanit said on Monday the national carrier will be the first SET-listed state enterprise the Finance Ministry will serve as a loan guarantor.

She said that under the law, the Finance Ministry can guarantee loans worth no more than 20% of expenditure in any given year.

She added that the State Enterprise Policy Committee (SEPC) can be asked to ease the regulation prohibiting the ministry from guaranteeing loans for a state enterprise that has suffered financial losses for three consecutive years.

THAI plans to seek short-term loans of 54 billion baht to finance business operating expenses as it undertakes the rehabilitation.

In exchange for the loan, the national carrier is obliged to follow through on the rehabilitation plan to be approved by the cabinet, the source said. The obligations include cost management such as an early retirement scheme.

The rehabilitation plan has been approved by the SEPC chaired by Prime Minister Prayut Chan-o-cha and is pending cabinet approval.

Speaking after the May 5 cabinet meeting, Gen Prayut called on THAI staff to follow the rehabilitation plan, saying it was a matter of life and death for the airline.

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