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Thai Airways International (THAI) is on the verge of ending its rehabilitation scheme, with the expected departure from the plan set for mid-2025. Key beneficiaries of this move include major creditors, particularly Bangkok Bank (BBL) and Krungthai Bank (KTB), who are presented with multiple debt repayment options.

 

In recent submissions to the Stock Exchange of Thailand, THAI's management expressed confidence in achieving positive shareholder equity by February next year, preparing for an exit from the rehabilitation plan in April. The Central Bankruptcy Court is anticipated to approve this exit by May, potentially allowing THAI's shares to resume trading by June.

 

BBL and KTB are among the 36 entities with claims totalling 404 billion baht, belonging specifically to the majority debtor group carrying 31 billion baht in unsecured debt. Since the onset of THAI's restructuring in 2020, these banks have been provisioning for their exposure.

THAI's exit strategy involves converting a portion of the debt into equity at a rate of 2.54 baht per share, alongside a repayment extension option of up to 15 years at a 1.5% interest rate. In the plan’s fourth quarter, THAI will issue 9.8 billion new shares to support this debt-to-equity conversion aiming to stabilise its financial standing.

 

Notably, after the debt conversion, BBL's ownership in THAI could increase from 0.4% to 5.8%, an indication of its growing stake. As loan statuses improve, BBL's NPL ratio is expected to decrease, signalling enhanced financial health for the banks involved. KTB is also poised to see similar declines in its NPL ratio, promising a more robust position moving forward.

 

The strategic moves THAI implements anticipate not only revitalising the airline but fortifying the creditors involved as both banks cautiously optimize their exposure and minimise non-performing loans. This scheduled recovery heralds a hopeful turning point for the beleaguered airline.

 

File photo for reference only

 

-- 2024-10-22