Court okays reduction in Thai Airways’ registered capital

The Thai Central Bankruptcy Court has approved the reduction of Thai Airways International’s registered capital from THB27 billion baht (USD809.8 million) to THB21.8 billion (USD653.8 million) in line with the carrier’s proposed restructuring plan.

In a stock market filing, the carrier said its petition was formally approved on August 17 and follows the approval of its restructuring plan in mid-June 2021 and the administrators’ adoption of the appropriate resolution on July 8. The reduction will be executed through a write-off of over 516 million unissued shares and will thus have no impact on the carrier’s shareholding structure or liquidity.

Matching Thai’s registered capital to its paid-up capital will allow it to seek up to THB196.4 billion (USD5.89 billion) in fresh funding through the issuance of new shares which are expected to be split evenly between the Ministry of Finance, Thai’s largest but not majority owner, and other shareholders.

In other news, the Stock Exchange of Thailand has posted “Suspend” and “Notice Pending” (SP and NP) signs on Thai Airways’ securities after its auditor withheld its opinion on the airline’s half-year financial statement. Even though the carrier reported a THB11.1 billion (USD332.9 million) net profit in the January-June 2021 period, most of the profits were due to non-operating revenues from restructuring. On the operating level, the carrier lost THB14.3 billion (USD428.9 million). The auditor, Deloitte Touche Tohmatsu Jaiyos Co. Ltd., refrained from expressing an opinion on the report due to the carrier’s lack of liquidity, default on debt payments, the ongoing uncertainty related to the impact of the COVID-19 pandemic, and its ongoing restructuring process.

The SP and NP signs do not impact the trading of Thai’s stocks but could potentially lead to their suspension in the future.