Finance Ministry Plans Capital Boost to Propel Thai Airways Recovery

[snoop1130]

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The Ministry of Finance is planning to propose a financial boost for Thai Airways International at the upcoming Cabinet meeting next week. This initiative aims to support the airline's recovery efforts while ensuring the government maintains less than a 50% shareholding, keeping it from becoming a state enterprise. Tibordee Wattanakul, Director-General of the State Enterprise Policy Office, confirmed this strategy.

 

The plan includes allowing current shareholders to buy new shares and letting creditors, including the finance ministry, convert debt into equity. This capital restructuring is set to occur from December 6 to December 12.

 

Currently, the Ministry of Finance holds a 47.9% stake in the airline, which is wrapping up a four-year debt restructuring. After converting debt to equity and injecting new capital, the ministry, Vayupak Fund, and Government Savings Bank will collectively own about 40% of Thai Airways.

 

The ministry expects that if existing shareholders purchase all the new shares, Thai Airways could raise up to 44 billion baht. Participation from the Vayupak Fund will be decided by a state asset management company, and the Government Savings Bank’s involvement will depend on its board's decision. Mr. Tibordee emphasized that any capital injection would not push the airline into state enterprise status, projecting the shareholding to remain around 40%.

 

 

To be classified as a state enterprise, government ownership must be at least 50%. The finance ministry plans to fund the injection from revenue from its securities management, not exceeding 20 to 30 billion baht, as noted by Mr. Tibordee.

 

The ministry has informed Thai Airways of its willingness to convert debt into equity, amounting to 70-80 billion baht, originating from debt dating back to 2020. Converting debt to equity could benefit the ministry if the value of shares increases over time, while a full debt repayment could take around ten years.

 

With the capital restructuring, Thai Airways is expected to improve its financial health, aiming to finish its rehabilitation by February 2025 and to be back on the Stock Exchange of Thailand by May.

 

-- 2024-11-29

 

 

[smedly]

seems this company is still not balancing the books, I'd call that a risky investment