The Ministry of Finance is allocating 20 billion baht to purchase additional shares in Thai Airways International on Dec 12, raising its stake in the national carrier to 40% from 30%.
The purchase will allow the ministry to retain its position as the major shareholder of the flag carrier, said Tibordee Wattanakul, director-general of the State Enterprise Policy Office (Sepo).
However, the move will not restore the company to its previous status as a state enterprise, which would require total state holdings exceeding 50%.
After its capital restructuring, THAI will achieve a positive equity position, fulfilling the conditions required to exit business rehabilitation. The company is expected to exit rehabilitation by February and resume trading on the Stock Exchange of Thailand by May.
Under the rehabilitation plan, THAI creditors have agreed to convert debt into equity. Following the conversion, the ministry’s stake would fall from 47.99% to 30%. However, after the ministry and other state agencies exercise their rights to purchase additional shares in proportion to their holdings, their combined stake will increase to 40%.
Mr Tibordee said the 20 billion baht required for the rights exercise will be sourced from revenue generated through the ministry’s asset management activities.
Additionally, the ministry has fully exercised its right to convert debt into equity. THAI owes the ministry 70–80 billion baht, originating from liabilities accumulated since 2020.
Mr Tibordee said the advantage of converting debt into equity is that after holding the shares for one year, if the share price improves the ministry can sell the shares and recover its funds. In contrast, waiting for debt repayment could take years, even though it includes an additional 1.5% interest on the debt value.
Thai Airways International was established in 1960 and listed on the Stock Exchange of Thailand in 1991 as a state enterprise, with the government holding more than 50% of its shares.
The company faced a significant business crisis during the Covid-19 pandemic in 2020, resulting in an accumulated loss of 141 billion baht. This led it to file for business rehabilitation with the Central Bankruptcy Court, which approved the plan in 2021.
As the pandemic wound down and the travel market started to recover, so too did the airline’s performance. In 2023 it generated revenue of 161 billion baht and achieved a net profit of 28.1 billion. Over this period, the company significantly reduced expenses, particularly employee-related costs. The workforce was reduced to 16,300 employees, from 28,000 in 2019.
The carrier also axed many unprofitable routes and reduced its fleet from about 100 aircraft to 67 at present. However, earlier this year it placed an order for for 45 Boeing 787-9 Dreamliner aircraft, the largest in Thai history. The planes are to be delivered between 2027 and 2033.