Bangkok’s Nok Air Seeks Amendments to Rehabilitation Plan
Nok Air, the Bangkok-based low-cost carrier, is taking significant steps to restructure its financial standing by filing a petition to amend its business rehabilitation plan. This move follows recent meetings held on November 27 and December 4, which approved the proposed changes, as disclosed in a December 13 filing with the Stock Exchange of Thailand.
Business Rehabilitation Journey
In September 2021, Bangkok’s Central Bankruptcy Court approved Nok Air’s entry into a business rehabilitation process, analogous to Chapter 11 in the United States. At the time, the airline was burdened with debts totaling THB26 billion (approximately USD752 million). The Jurangkool family, holding a 75% stake in Nok Air, emerged as the largest creditor, significantly influencing the carrier’s financial restructuring efforts.
Proposed Amendments to the Rehabilitation Plan
The recent amendments to Nok Air’s rehabilitation plan aim to align the airline’s strategy with current business conditions and ensure efficient management of its finances and operations. The key objectives of the proposed amendments include:
- Revising and Updating the Business Plan: Enhancing the overall strategy, fleet composition, financial projections, and industry outlook to better position Nok Air for long-term viability.
- Adjusting Loan Facilities and Fundraising Methods: Modifying existing loan terms and exploring new fundraising avenues to alleviate financial pressures.
- Updating Conditions and Repayment Terms: Refining the repayment structure to creditors, including terms related to prepayment and overall debt management.
- Extending the Rehabilitation Timeline: Seeking a one-year extension to the existing rehabilitation plan, thereby extending the total duration to six years.
- Empowering Plan Administrators: Updating the authorities responsible for implementing and managing the rehabilitation plan to ensure effective oversight and execution.
These amendments are designed to provide a robust framework for Nok Air to navigate its financial challenges and emerge as a sustainable and competitive player in the aviation market.
Fleet and Operations
According to the ch-aviation PRO airlines module, Nok Air currently operates a fleet of fourteen Boeing 737-800 aircraft, serving 21 airports across Thailand, India, and China. This fleet configuration supports Nok Air’s strategy to maintain a versatile and efficient operation, catering to both domestic and international routes.
Delisting from the Stock Exchange of Thailand
In related developments, the Stock Exchange of Thailand has moved to delist Nok Air Public Company Limited, trading under the name Nok Air. Announced on December 18, the bourse outlined that trading in Nok Air’s shares will continue between December 27 and January 8, subject to specific conditions. The official delisting is scheduled for January 9.
This decision follows a series of warnings issued to Nok Air for repeatedly failing to submit audited financial accounts on time. In 2023, the Stock Exchange of Thailand suspended trading in Nok Air’s shares due to these compliance issues, leading to the current delisting process.
Future Outlook
Nok Air’s proactive approach in seeking amendments to its rehabilitation plan signifies the airline’s commitment to overcoming its financial hurdles and restoring investor confidence. By updating its business strategy and financial management practices, Nok Air aims to stabilize its operations and ensure long-term growth.
The extension of the rehabilitation plan to six years provides Nok Air with additional time to implement necessary changes and achieve financial sustainability. Additionally, the delisting from the Stock Exchange of Thailand underscores the importance of regulatory compliance and transparent financial reporting in maintaining market trust.
Nok Air’s efforts to amend its business rehabilitation plan reflect a strategic move towards financial recovery and operational efficiency. As the airline navigates through this critical phase, stakeholders will be closely monitoring its progress and the effectiveness of the proposed amendments. With a focused approach and support from major creditors, Nok Air aspires to reestablish itself as a viable and competitive low-cost carrier in the Southeast Asian aviation market.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com