Thai Airways exits debt restructuring plan with court approval

[BANGKOK] Thai Airways International won court approval to exit a debt restructuring programme, paving the way for resumption of trading in its stocks after a four-year gap.

The Central Bankruptcy Court in Bangkok on Monday (Jun 16) granted the national carrier’s plea to emerge from the court-supervised debt rehabilitation. The airline successfully completed the restructuring as it managed to increase capital as specified under the plan, restructure business its without any delay, and generate profit before tax, the court said.

The exit will now allow the company to carry out normal business operations five years after it fell into pandemic-triggered financial distress with more than 400 billion baht (S$16 billion) of debt. Trading of the company’s shares may also resume in late July or early August following the court’s decision, Thai Airways has said.

“It’s now the duty of the new board to ensure sustainable growth of Thai Airways as the court-appointed debt rehabilitation team members have laid the groundwork for the company’s business expansion,” Piyasvasti Amranand, court-appointed debt administrator, told reporters.

The airline is currently benefiting from a post-pandemic travel boom, which has boosted its earnings and cash flow. Its improved financials have allowed it to order a new fleet of Boeing and Airbus jets to support its expanding operations.

Thai Airways saw its net income jump four-fold in the first quarter of this year as the number of passengers it served rose more than 11 per cent from a year earlier. The airline sees strong bookings in the second quarter, led by rising demand for its flights to Europe, Australia and India, chief executive officer Chai Eamsiri said in May.

The airline appointed a new board of directors in April, including two senior officials from the Finance Ministry, to prepare for the debt programme exit. The ministry’s permanent secretary Lavaron Sangsnit is among the 11-member board.

As part of the rescue plan, the carrier’s creditors agreed to convert about 53 billion baht of debt into shares. It also sold about 23 billion baht in new shares to existing shareholders to boost its capital.

Thai Airways’ shareholder equity returned to a surplus after completing the debt-to-equity conversion and rights offering. It had a negative shareholder equity of about 27 billion baht after years of losses.

“We have a lot of financial strength in Thai Airways to continue our expansion and success in the competitive air travel industry,” Chai said on Monday. “Thai Air’s main mission is to sustain its long-term growth and push for Thailand as the region’s aviation hub.” BLOOMBERG