MIAMI – Regarding its financial situation, Thai Airways (TG) announced it will find legal counsel to request a rehabilitation plan to Thailand’s Bankruptcy Court.
Clarifying the bankruptcy situation that recently made the rounds in the media regarding the approved bankruptcy proceedings by Prime Minister of Thailand, Prayut Chan-o-cha, TG Second Vice Chairman, Chakkrit Parapuntakul said that the company would also submit the plan request to the U.S. Bankruptcy Court.
The Thai government holds a 51% stake in the flag carrier through the Ministry of Finance, so TG’s government men in charge reached, and agreement for a rehabilitation plan signed by the Boards of Directors and State Enterprise Policy Committee (SEPC) on April.
Previously, Bangkok Post reported that PM Prayut, Deputy Prime Minister, Anutin Charnvirakul, and Deputy Transport Minister, Thaworn Senneam would restructure the airline through court-appointed administrators, but formal documents were not ready yet.
Besides the informal frame, Anutin would say that the move had to be agreed by the cabinet and shareholders too; then, it would be official, as the remaining 49% stake in the company belongs to the Stock Exchange of Thailand (SET), according to media.
On its part, Finance Minister, Uttama Savanayana, did not attend the meeting on May 15 where the bankruptcy protection was reached but assured that the final plan would be approved and announced in the next few days.
By now, TG’s official statement says that the rehabilitation plan is being prepared to be presented to the cabinet for their final resolution.
TG’s financial enviroment
The plan decision was reinforced due to the negative effect of the COVID-19 on the airline and the commercial aviation industry. However, TG was already facing difficulties to the point of being close to receiving government help for US$1.7b prior to the crisis, according to the executive.
This lifeline is the last one that the Thai government will throw at the company, as it stated, but it will come with the condition of a business restructuring because the airline has a debt of US$7.6b, according to Thai PBS. Just in 2018, it reported US$275m in losses from a US$6.06b revenue.