Thai Airways seeks B50bn infusion under debt revamp

Thai Airways seeks B50bn infusion under debt revamp

An Airbus A-350 aircraft sits on a tarmac of Suvarnabhumi airport on Wednesday. (Photo by Somchai Poomlard)
An Airbus A-350 aircraft sits on a tarmac of Suvarnabhumi airport on Wednesday. (Photo by Somchai Poomlard)

Thai Airways International Plc is seeking a capital infusion of as much as 50 billion baht under a debt restructuring plan set to be submitted to the Central Bankruptcy Court to keep the flag carrier operational, according to people familiar with the matter.

The fund may be raised through equity, loans or convertible securities, said the people, who asked to not be identified before the debt plan is submitted to the court on Tuesday. The capital infusion plan will need to be backed by the airline’s hundreds of credit-holders and approved by the court, they said.

Under the debt rehabilitation plan discussed by the court-appointed planners, banks and bondholders will have to take minimum haircut on their exposure, the people said.

A spokesman for THAI declined to comment on the specifics of the debt rehabilitation plan but said the carrier’s acting president Chansin Treenuchagron will hold a briefing at 2pm time on Tuesday.

THAI, which posted a record loss of 141 billion baht last year, is seeking to reduce its liabilities from 336.7 billion baht and return to profit once the Covid-19 pandemic ends. The airline has sold stakes in some units, cut staff and opened its flight simulators to the public to generate additional revenue and cushion the blow from an unprecedented hit to the global tourism and travel industry.

The court had in September approved THAI’s request to appoint EY Corporate Advisory Services  and the carrier’s board members as debt revamp planners.

Largest shareholder

The Ministry of Finance, the largest shareholder of THAI, will look at the restructuring plan in detail once it’s submitted to the court to see if it’s in line with government rules and can support it, the State Enterprise Policy Office said.

The office will also consult the Public Debt Management Office before advising the government on its stance, it said.

The airline’s losses last year included one-time expenses of almost 92 billion baht from an employee separation plan and impairment losses on aircraft, right-of-use assets and aircraft spare parts, it said last week.

The widening losses sent THAI equity to a negative 127 billion baht at the end of last year, it said.

Its shares, up 29% this year, were suspended last week as the Stock Exchange of Thailand considered whether the company is subject to delisting because of its equity turning negative. The bourse will decide on delisting by Sunday.

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