THAI not about to file for bankruptcy, says Prayut

THAI not about to file for bankruptcy, says Prayut

A Thai Airways International plane is seen at Suvarnabhumi airport. (Bangkok Post file photo)
A Thai Airways International plane is seen at Suvarnabhumi airport. (Bangkok Post file photo)

Prime Minister Prayut Chan-o-cha has signalled that ailing Thai Airways International (THAI) does not yet need to file for bankruptcy to prevent ruin as the Finance Ministry surveys all rescue options.

Calls have been made for the national carrier to seek bankruptcy in court so it can qualify to enter a rehabilitation programme.

Gen Prayut on Wednesday said the government is deciding on several action plans to save the national carrier.

He said that rescuing the airline relies on following legal procedures under two laws: one governing the company's labour union, and the State Enterprise Act.

"A method must be established to take care of the problem," Gen Prayut said.

However, a Finance Ministry source said the ministry is studying the outcomes of THAI filing for bankruptcy and entering a business rehabilitation programme.

As a majority shareholder in THAI, the ministry must study the strengths and weaknesses of plans to save the national carrier.

Results of all studies are to be handed to Finance Minister Uttama Savanayana before they are discussed with with Transport Minister Saksayam Chidchob. The source said the first round of discussions is expected to take place soon.

A 50 billion-baht bailout loan is also being considered, in which the ministry will act as a guarantor to rescue THAI.

However, the plan has run into criticism from politicians and experts who argued the bailout would be costly and hamper reforms which the national carrier needs to conduct.

According to the ministry source, the topic of bankruptcy was not raised during a State Enterprise Policy Committee (SEPC) meeting with Gen Prayut on April 29. The meeting was dominated by issues surrounding THAI's revamp and the bailout.

According to the Stock Exchange of Thailand (SET), THAI posted a net loss of 2.11 billion baht in 2017, which ballooned to 11.6 billion in 2018 and 12 billion last year.

The proposed 50-billion-baht bailout loan came with strings attached as THAI was ordered to furnish an all-out rehabilitation plan to be submitted to the Transport Ministry, the Finance Ministry, the SEPC and later to the cabinet for approval.

The Finance Ministry source said if there was to be a bankruptcy filing, the Transport Ministry, which directly supervises THAI, must talk it over with the Finance Ministry first.

Meanwhile, Atavit Suwannapakdee, secretary-general of the Kla Party, has thrown his support behind THAI entering bankruptcy, saying it would increase the airline's bargaining power with creditors.

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