Airline seeking capital to remain a going concern, people say
Thai Airways International Pcl is seeking a capital infusion of as much as 50 billion baht ($1.65 billion) under a debt restructuring plan set to be submitted to a 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 in Bangkok 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 Airways 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 2 p.m. local time on Tuesday.
Thai Airways, which posted a record loss of $4.7 billion 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 bankruptcy court had in September approved Thai Airways' request to appoint EY Corporate Advisory Services Ltd. and the carrier's board members as debt revamp planners.
Largest Shareholder
Thailand's Ministry of Finance, the largest shareholder of Thai Airways, 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 Airways equity to a negative 127 billion baht at the end of last year, it said.
Thai Airways 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 March 7.
(Updates with comment from finance ministry in seventh paragraph.)
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