THAI debentures downgraded to default
published : 27 May 2020 at 14:55
writer: Pathom Sangwongwanich
Tris Rating has downgraded Thai Airways International's company rating and senior unsecured debentures to default following the Central Bankruptcy Court’s acceptance of THAI’s rehabilitation petition.
“As a result, all of THAI’s debt obligations have been placed on automatic standstill by law, which means THAI has halted all debt services,” the Tris announcement said.
“Tris Rating will reassess the credit ratings on THAI when the company has reached an agreement with all stakeholders on the rehabilitation plan.”
Earlier, Tris Rating downgraded its rating on THAI and the carrier’s senior unsecured bonds to BBB from A.
The Central Bankruptcy Court on Wednesday accepted the THAI case and set the first hearing for August.
The court also stated that creditors of THAI could oppose the restructuring process for up to three days prior to the first hearing. After that, the court would consider that creditors agree with the process.
THAI filed its bankruptcy request with the court on Tuesday, seeking protection to continue business pending debt restructuring and rehabilitation.
The company has outstanding debts totalling 244.8 billion baht, 30% of which are owned domestically.
The national carrier has also lost its state enterprise status after Vayupak Fund 1 bought a 3.17% stake from the Finance Ministry last Friday.
The stake purchase was at a price of four baht per share, a source said.
The purchase cut the Finance Ministry's holding to 48%, immediately stripping the carrier of its state enterprise status.
State-owned Vayupak Fund 1 is jointly managed by Krungthai Asset Management Plc and MFC Asset Management.