Govt to inject another B10bn into THAI
Finance Ministry expected to sell shares in other state enterprises to raise necessary funds
published : 27 Oct 2022 at 17:32
writer: Wichit Chantanusornsiri
The Finance Ministry plans to inject 10 billion baht into Thai Airways International to keep its shareholding from dipping below 40%, according to the State Enterprise Policy Office (Sepo).
The ministry will sell some of the shares it holds in other state enterprises to raise the necessary funds, said Pantip Sripimol, the Sepo director-general.
No decision has been made yet as to which state enterprises will be targeted. The final say will be made by policymakers.
The ministry is the national carrier’s biggest shareholder with a 47% stake.
As a matter of principle, the funds earmarked for recapitalisation of the financially ailing carrier will not come from the central budget that the government allocates to the ministry.
The move comes after the Central Bankruptcy Court on Oct 20 approved THAI’s revised business reorganisation plan, setting in motion a complete financial restructuring process.
The debt-ridden flag carrier submitted the revised plan following a better-than-expected recovery from the most financially trying period in its history.
The airline’s balance sheet has improved markedly since the removal of Covid-19 border restrictions, pushing up passenger and cargo traffic in recent months.
The majority of shareholders, including the ministry, have agreed to the revised plan which is critical for reviving the airline and pulling it out of rehabilitation.
The next step is for the airline to start converting debt into equity and recapitalising. The plan requires the Finance Ministry to hold at least 40% of the shares in the carrier.
It was reported earlier that the debt-to-equity conversion and recapitalisation plan is estimated at 25 billion baht, to be completed over the next two years.
The company has also undertaken drastic cost-cutting measures, including a reduction of its workforce from 29,000 to 14,400, while its fleet has been cut from 103 planes to 58.
It is estimated that once the airline has implemented the revised plan and returns to the black while managing to service its debts, the company can be relisted on the stock market, probably at the end of 2024.
Ms Pantip said the Sepo would support the sale of the Finance Ministry’s shares in non-listed businesses. Most of those shares were gained from acquiring foreclosed assets.