PM on board for THAI rescue under bankruptcy law
Savings cooperatives with money in THAI rush to reassure members their investments are safe
The government is considering rehabilitation for Thai Airways International under the bankruptcy law, as members of savings cooperatives start to fret about their investments in the ailing flag carrier.
Deputy Prime Minister Anutin Charnvirakul, who oversees the Transport Ministry, said Prime Minister Prayut Chan-o-cha had agreed to the move after a meeting on Friday.
Transport Minister Saksayam Chidchob and Deputy Transport Minister Thaworn Senneam, who supervises THAI, also attended the meeting.
"THAI has conducted several internal business rehabilitation plans but failed. A new one entailing debt rehabilitation in which the lenders provide 10 million baht or more [each] could be used," Mr Anutin said.
If the company agrees to enter rehabilitation, the bankruptcy court will oversee the process and appoint a plan administrator with the consent of lenders and the debtor.
But Mr Anutin said THAI's shareholders will have to decide on the proposed rehabilitation plan.
"In terms of policy, we'll have to reach a conclusion soon. The prime minister says the airline should go for rehabilitation. We also have the Covid-19 situation. I think it is the only path. Everyone has to take a step back, so we can move forward," he said.
The rehabilitation plan is expected to be considered by the the State Enterprise Policy Office (Sepo) on Monday.
The Finance Ministry, which is the airline's largest shareholder, however, was not at Friday's meeting.
Finance Minister Uttama Savanayana said he did not attend the meeting because he had other engagements, but insisted there is no conflict between the Finance and Transport ministries.
He said the rehabilitation plan is likely to be finalised next week but declined to discuss any details, including a proposed 50-billion-baht bailout loan.
THAI reportedly has less than a month of cash flow left and will just be able to pay staff salaries this month.
Meanwhile, the Cooperative Promotion Department has urged people not to panic and withdraw money over fears about THAI's financial health.
Pichet Viriyapaha, the department's chief, said measures had been put in place to limit losses for its members, noting their investment in THAI was relatively small compared to the 3.3 trillion baht held in savings cooperatives nationwide.
The plea came after at least five cooperatives reported over 100 million baht in cash withdrawals per day, apparently triggered by fears of the airline going under.
"Please don't panic. No cooperatives have financial problems but a rush to withdraw money will make things complicated. The department already has a plan to limit the effects," Mr Pichet said.
He said THAI has never missed related dividend payments and this year it is scheduled to pay 1.108 billion baht to 20 cooperatives from August-September.
The Police General Hospital cooperative also moved to allay concerns about its financial health, saying it does not have liquidity problems and is monitoring the THAI situation. The cooperative has reportedly invested 768 million baht in the airline, and the Royal Thai Police saving cooperative has invested 97 million.