Thai Airways revamp plan gets support from top shareholder

[BANGKOK] Thailand's finance ministry, the largest shareholder of Thai Airways International, signalled its support for a restructuring plan that includes raising fresh capital, a temporary freeze on repayment of borrowings and slashing its workforce by half to return the debt-ridden airline to profit.

The key elements of the debt rehabilitation plan are "quite acceptable," Pantip Sripimol, director general of the State Enterprise Policy Office under the finance ministry, said Wednesday. The ministry will study the restructuring proposals in detail before deciding on its vote, she said. The ministry will support the airline's fund-raising plan as it's on a recovery path, Deputy Prime Minister Supattanapong Punmeechaow said.

Thai Airways, with liabilities of about US$11 billion last year, expects its creditors to vote on the court-mandated debt recast plan on May 12, Acting President Chansin Treenuchagron said Tuesday. The airline, which posted a record loss of US$4.7 billion last year, aims to return to profit in 2024, he said.

Under the restructuring plan, the airline will seek to raise US$1.65 billion of fresh capital over the next two years through new shares or borrowing. The company will cut its workforce to 13,000-15,000 by 2022, while proposing no haircut on debt, a waiver of unpaid interest on loans and deferment of bond repayments for six years, company officials said Tuesday.

"The finance ministry and other creditors are quite satisfied with the no-haircut option as this should help increase the possibility of the plan being approved," Ms Pantip said. "We can understand that it will take longer to get the money back given the current situation." The ministry will subscribe to new shares issued by the airline in line with its shareholding, Mr Supattanapong said.

Thai Airways, which has posted losses every year barring one since 2013, saw losses widen last year after the coronavirus outbreak ground most of its services to a halt. The airline sold stakes in some units and reduced staff to cushion the blow but still saw its equity turn negative, prompting the Thai stock exchange to suspend its shares.

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