Govt 'won't back' billion-baht THAI cash injection

Govt 'won't back' billion-baht THAI cash injection

A Thai Airways International jet sits parked on the tarmac of Suvarnabhumi airport. (Photo by Wichan Charoenkiatpakul)
A Thai Airways International jet sits parked on the tarmac of Suvarnabhumi airport. (Photo by Wichan Charoenkiatpakul)

The Finance Ministry will not recapitalise financially troubled Thai Airways (THAI) of which it is the biggest shareholder, the State Enterprise Policy Office (SEPO) chief said.

The remark by SEPO director-general Pantip Sripimol comes amid concerns the carrier will regain the status of a state enterprise through the re-acquisition of the ministry's majority stake in THAI.

The airline lost its state-owned status last year when the ministry decided to reduce its stake to under 50%, to help ease the debt-rehabilitation process.

Several cabinet ministers, however, were concerned the government would need to guarantee a loan worth billions of baht to prop up THAI if it were to come under the state enterprise umbrella again.

Reportedly supporting THAI's reinstatement as a state enterprise were Finance Minister Arkhom Termpittayapaisith and Deputy Prime Minister Supattanapong Punmeechaow, who is also chief of the government's economic team.

They argued the reinstatement, which would require the Finance Ministry returning as a majority shareholder, would boost the airline's financial strength and its bargaining power with creditors.

Creditors are meeting on Wednesday to decide whether to accept the airline's debt restructuring plan.

Meanwhile, Ms Pantip insisted the ministry would not seek to recapitalise the airline and was prepared to see its stake diluted if other shareholders bought more shares.

The ministry holds a 49.9% stake in THAI. She said if the ministry injected more funds into the company, it would be akin to attempting to divert money to "fill up the sea", a move which be hard to justify to taxpayers.

Now that THAI is operating as a private company, it is no longer entitled to state assistance and the Finance Ministry is under no legal obligation to offer help to a private firm despite the vast shares it owns in the airline.

SEPO director-general declined to say whether THAI should be reinstated as a state enterprise, saying it is a matter of policy yet to be considered.

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