Korn says THAI Airways should file for bankruptcy to enable rehabilitation

 

©Democrat Party, Thailand

 

Former Finance Minister and Kla party leader Korn Chatikavanich has proposed that Thai Airways International files for bankruptcy, so the beleaguered national flag carrier can enter rehabilitation under the protection of the country’s bankruptcy law.

 

The former finance minister said, in his Facebook post today, that this is a golden opportunity for the financially-strapped airline to enter administration, under the bankruptcy process, to clear the way for effective rehabilitation.

 

He said he supports the idea, which was originally put forward by Mr. Vicha Mahakhun, a top legal expert and former Constitutional Court judge.

 

Although THAI is unable to service its huge debts, Korn said that the airline capable of carrying on with its business adding, however, that the Government guarantee for the proposed 50 billion baht loan the airline is trying to secure, should only be made available once the airline has entered court sanctioned rehabilitation.

 

Regarding the huge debts incurred to purchase aircraft, the Kla party leader suggested the airline should negotiate a hair-cut with the creditors, noting that the aviation sector is set to remain depressed for years to come, so there will be fewer buyers for new or used aircraft.

 

A court sanctioned rehabilitation is a way in which a financially weak business can survive, on conditions which are fair to all parties concerned, said Korn, adding “This is not the time to feel ashamed, but a golden opportunity to start afresh with a viable and achievable structure and strategies.”

 

Meanwhile, Deputy Prime Minister Anutin Charnvirakul Transport Minister Saksayam Chidchob, Deputy Agriculture Minister Mananya Thaiseth and Deputy Transport Minister Thaworn Senneam met today to discuss the airline’s rehabilitation.

 

Those at the meeting, dominated by ministers of the Bhumjaithai party, were reported to be against a rescue plan for THAI, and would like the airline to file for bankruptcy prior to rehabilitation.

 

Finance Minister Uttama Savanayana did not attend the meeting, although the Finance Ministry is a major shareholder in the national flag carrier.

 

The cabinet is likely to postpone discussion of the rehabilitation issue again at its meeting next Tuesday.

 

Source: https://www.thaipbsworld.com/former-finance-minister-says-thai-airways-should-file-for-bankruptcy-to-enable-rehabilitation/

 

-- © Copyright Thai PBS 2020-05-15

 

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Of course in any rational economics it would have folded, but then how would the well connected get free travel.

The reality the poor who will never fly subsidise the well off.

Edited May 15, 20206 yr by RubbaJohnny

Oh!...…...the FACE! ????

Yeah, let’s go for bankruptcy, and let the many thousands of travelers who paid for tickets but were not refunded join the long queue of creditors. Will these travelers ever come back to fly with the company?

ticket refunds - creditors and banks get shafted and the government pays nothing

1 hour ago, snoop1130 said:

He said he supports the idea, which was originally put forward by Mr. Vicha Mahakhun, a top legal expert and former Constitutional Court judge.

 

Oh wow… A Constitutional Court Judge. As far as I am concerned these guys are no better than Amoebas. No credibility here for him! 

The airline should negotiate a haircut with the creditors and a complete skinhead of the management of this festering rotten to the core dinosaur ????

10 hours ago, snoop1130 said:

The cabinet is likely to postpone discussion of the rehabilitation issue again at its meeting next Tuesday.

Herein lies one of the problems with this government. When you have a difficult problem (especially if it involves possible loss of face) put off consideration for as long as possible and hope it goes away.

Edited May 15, 20206 yr by bangkokfrog

33 minutes ago, bangkokfrog said:

When you have a difficult problem (especially if it involves possible loss of face) put off consideration for as long as possible and hope it goes away.

Not just the govt.  it's  the Thai way.

13 hours ago, snoop1130 said:

 

Meanwhile, Deputy Prime Minister Anutin Charnvirakul Transport Minister Saksayam Chidchob, Deputy Agriculture Minister Mananya Thaiseth and Deputy Transport Minister Thaworn Senneam met today to discuss the airline’s rehabilitation

 

There is the problem right there....

 

Health (knows nothing about health) minister and agriculture minister involved in discussions about an airlines rehabilitation !!!

Why do they all have a Harry Potter type face. Just ink in black frames.

File for bankruptcy definitely, but probably after the 50B loan goes through.....they need a final bite of the cherry!

15 hours ago, snoop1130 said:

Finance Minister Uttama Savanayana did not attend the meeting

his Mom was briefing him on bankruptcy proceedings, however, Anutin was there to make sure everyone was wearing a mask

2 hours ago, cornishcarlos said:

 

There is the problem right there....

 

Health (knows nothing about health) minister and agriculture minister involved in discussions about an airlines rehabilitation !!!

Perhaps the agriculture minister plans to establish a kibbutz for all these soon-to-be-laid-off ground workers and air crew so they can grow vegetables and fruits to help pay off the airline's massive debts. Because surely the executives and board won't.  

Finally! I pray THAI fails. Get rid of it. 

11 minutes ago, Fex Bluse said:

Finally! I pray THAI fails. Get rid of it. 

 

I'm sure all their employees feel a bit different to you ????

5 hours ago, bangkokfrog said:

Herein lies one of the problems with this government. When you have a difficult problem (especially if it involves possible loss of face) put off consideration for as long as possible and hope it goes away.

A restructuring expert I know had a great saying, "Hope is NOT a strategy". Sadly, the Thais have not learned that yet.

A bigger issue I realized today while reading the BK Post (once in a blue moon there is something intelligent there), a significant amount of THAI's debt is held by the co-operative banks in country. They will be the ones taking the haircut and losses, along with some of the big banks. This will ripple through the system and potentially cause some of these banks to fail their capital requirements. If the public gets spooked, there could be a run on some banks or co-ops further escalating the problems.

One of the lessons from the 2008 crash is the interconnectivity of the financial system. Similar to a butterfly flapping its wings causing a calamity on the other side of the world.  THAI has over 100 billion in debt and losses will have implications far and wide. So it's not as easy as some posters would like to think - let THAI fail but then what about the banks and co-ops, and then the next domino. 

To wrap it up: this is a highly complex problem to work through involving not only THAI, but a large part of the banking system. I am afraid the parties trying to craft a solution are grossly inadequate to deal with this situation and when politics are involved as they are now, it's going to be a spectacular mess.

 

46 minutes ago, Fex Bluse said:

Finally! I pray THAI fails. Get rid of it. 

I have flown Thai hundreds of times, what is so bad about it, on a personal basis I get on a plane and get off at the other end!

If I never read TVF that would be the end of the story, why all the animosity! ????

3 hours ago, cornishcarlos said:

 

There is the problem right there....

 

Health (knows nothing about health) minister and agriculture minister involved in discussions about an airlines rehabilitation !!!

I suppose it is because they are regarded as "high flyers"!!

Some common sense AT LAST!

Bangkok Post front page. The PM is on board for rehab under bankruptcy. 

17 hours ago, snoop1130 said:

 

Korn says THAI Airways should file for bankruptcy to enable rehabilitation

 

Not sure how much an American nu-metal rock band know about bankruptcy, but I think it’s worth a shot. 

1 hour ago, Fex Bluse said:

Finally! I pray THAI fails. Get rid of it. 

How would the hi-sos get their free first class flights?

"golden opportunity to start afresh" is for Ministry of Finance to sell off the state's majority share and let someone else worry about capitalizing this failed airline. 

 

51 minutes ago, phkauf said:

A restructuring expert I know had a great saying, "Hope is NOT a strategy". Sadly, the Thais have not learned that yet.

A bigger issue I realized today while reading the BK Post (once in a blue moon there is something intelligent there), a significant amount of THAI's debt is held by the co-operative banks in country. They will be the ones taking the haircut and losses, along with some of the big banks. This will ripple through the system and potentially cause some of these banks to fail their capital requirements. If the public gets spooked, there could be a run on some banks or co-ops further escalating the problems.

One of the lessons from the 2008 crash is the interconnectivity of the financial system. Similar to a butterfly flapping its wings causing a calamity on the other side of the world.  THAI has over 100 billion in debt and losses will have implications far and wide. So it's not as easy as some posters would like to think - let THAI fail but then what about the banks and co-ops, and then the next domino. 

To wrap it up: this is a highly complex problem to work through involving not only THAI, but a large part of the banking system. I am afraid the parties trying to craft a solution are grossly inadequate to deal with this situation and when politics are involved as they are now, it's going to be a spectacular mess.

 

Correct its easy to say just let it go bankrupt and not think of all the co operative banks. In the BKK post it showed that some people that were connected to those co ops (not just banks) but plenty of people started to withdraw their money already 100 million a day. If they do something like this these people will be hurt too.

 

Then again if they dont hurt these people then they hurt all Thai people with spending tax money unwisely. The coops say they are not hugely exposed but who knows. I mean the could also not tell the truth. The police general hospital's coop has invested 768 million baht in Thai and the Royal Thai police savings cooperative has invested 97 million. Others might have more. But the amounts wont totally evaporate.

 

I am just a bit confused what these cooperatives hold. Shares or bonds ? I would say bonds but then why are they talking about dividends i thought that was only on shares not bonds, interest is paid on bonds. But i could have my terms wrong as I am not a native English speaker.

This is a short term solution. The long term problems are systemic and require a total management rebuild.

File for Bankruptcy without a care in the world

I thought the airline was owned by the government. The government has lots of money or can print lots of money so they cannot go bankrupt. The government should be responsible (haha) for refunds and the like. Really, all Thai can do is close shop and the government cover all their losses. It is redundant to claim bankruptcy. That would be a way to scam their creditors.

I imagine the fat cats that have managed to get billions of baht out of this, will be quite happy to leave and make way for a new lot of government trough feeders.

 

One could only hope that if they did file, then no bank on the planet would give them a line of credit

If they don't immediately sack the entire board that has presided over this fiasco, then it will never be able to rehabilitate.

 

They desperately need people with airline experience at the top level.