Thailand’s Finance Ministry to Inject Bt10 Billion into Thai Airways

Thailand’s Finance Ministry announced in August that it intended on inject Bt10 billion into Thai Airways International to keep its shares from falling below 40%.

According to Pantip Sripimol, the State Enterprise Policy Office director-general, the ministry would sell part of its holdings in other state firms to generate the necessary capital.

There has yet to be a decision regarding which state-owned enterprises would be targeted. Policymakers will have the final say. With a 47% stake, the Ministry of Finance is the national carrier’s largest shareholder.

As a general rule, the cash intended for the recapitalization of the financially troubled airline would not come from the ministry’s central budget.

The move comes after the Central Bankruptcy Court approved THAI’s amended corporate reorganization plan on October 20, kicking off a comprehensive financial restructuring procedure.

Thai Airways recovering from Pandemic

Following a better-than-expected comeback from its most financially difficult period in history, the debt-ridden flag carrier submitted the amended plan.

Thai Airways Internatioal’s balance sheet has improved significantly after lifting Covid-19 border restrictions, which has resulted in increased passenger and cargo traffic in recent months.

Most shareholders, including the ministry, have approved the updated strategy, which is vital for reviving the airline and bringing it out of rehabilitation.

Thai Airways will, after that, begin converting debt into stock and recapitalizing. The idea calls for the Finance Ministry to own at least 40% of the carrier.

It was previously stated that the debt-to-equity conversion and recapitalization plan is worth 25 billion baht and will be completed over the next two years.

Reduction of Thai Airways fleet

The company has also implemented extreme cost-cutting measures, including reducing its employees from 29,000 to 14,400 and it’s fleet from 103 planes to 58.

It is expected that once the airline implements the new plan and returns to profitability while servicing its debts, the company will likely be relisted on the stock market by the end of 2024.

Ms. Pantip stated that the Sepo would approve the sale of the Finance Ministry’s non-listed business shares. The majority of those shares were obtained through the purchase of foreclosed assets.

Thai Airways aims to complete its court-supervised financial restructuring plan by 2024. It declared bankruptcy in 2020 after incurring losses every year since 2013. However, a resurgence in worldwide air travel has increased its cash flow and lowered the number of loans indicated in the court’s first plan.

“Thai Airways’ condition is significantly improved,” said Arkhom, boosting creditors’ and shareholders’ confidence in the airline’s survival and future.

State-owned banks will be able to provide the entire 13 billion baht in new loans requested by the airline – around half of the 25 billion baht demanded previously. According to him, the new amount can be fully funded by state banks.

Thailand reopening its borders and other nations’ opening their borders will also help currency flow.

The most profitable flights for Thai Airways are those with connections to Europe.