Thai Airways Denies Extra Administrators in Rehab Plan

Bangkok’s Central Bankruptcy Court has dismissed Thailand’s Ministry of Finance (MoF) request to appoint two additional administrators for managing Thai Airways International’s (TG) business rehabilitation process at Bangkok Suvarnabhumi Airport. This decision marks a significant step in the ongoing efforts to restructure the national carrier and stabilize its financial standing.

During the hearing held on January 22, the court affirmed that the existing team of three administrators was effectively overseeing the rehabilitation process. The Ministry of Finance, which remains Thailand’s principal shareholder following a recent debt-to-equity conversion and a fresh share issuance, had proposed the inclusion of officials from the Office of Transport and Traffic Policy and Planning and the State Enterprise Policy Office. These additional administrators were intended to bolster the management panel responsible for guiding Thai Airways through court-supervised restructuring, a procedure comparable to Chapter 11 bankruptcy protection in the United States.

The court’s decision was influenced by the satisfactory performance of the current administrators. The panel has successfully navigated the rehabilitation process without any debt defaults, demonstrating fiscal responsibility and effective management. Furthermore, the proposal to add two more administrators was deemed financially imprudent, with an estimated annual cost of THB10 million (approximately USD300,000). The court ruled that this expenditure was unnecessary given the administrators’ competent handling of the airline’s restructuring.

Despite the court’s rejection, the majority of Thai Airways’ creditors had supported the Ministry’s bid to introduce additional administrators. This support indicated a significant level of confidence among creditors in the proposed expansion of the management team. However, the motion faced opposition from some minority shareholders, who likely had concerns about the increased costs and potential dilution of their influence within the rehabilitation process.

In a positive outcome, the court approved several key proposals aimed at strengthening Thai Airways’ financial health. These included reducing the par value of shares to eliminate accumulated losses and accelerating debt repayments. Accelerated debt repayments are expected to benefit creditors by providing them with quicker returns on their investments, thereby enhancing trust and support for the airline’s restructuring efforts.

Following the court’s ruling, Chai Eamsiri, CEO of Thai Airways, addressed the media through the Thai PBS World broadcaster. He expressed optimism about the airline’s progress, stating that Thai Airways remains on track to complete the business rehabilitation process within the first half of the year. Eamsiri also announced plans to relist Thai Airways on the Bangkok Stock Exchange shortly after exiting the rehabilitation process, signaling a return to normalcy and renewed investor confidence.

The rejection of the additional administrators does not signify a setback for Thai Airways. On the contrary, it underscores the effectiveness of the current management team in steering the airline through a challenging period. By maintaining fiscal discipline and avoiding debt defaults, Thai Airways demonstrates its commitment to financial stability and operational efficiency.

As Thai Airways moves forward, the focus will remain on executing the approved restructuring measures, reducing accumulated losses, and repaying debts promptly. These efforts are crucial for restoring the airline’s financial health and ensuring its long-term viability in the competitive aviation market. The successful completion of the rehabilitation process will pave the way for Thai Airways to emerge stronger, with improved financial metrics and enhanced operational capabilities.

The Central Bankruptcy Court’s decision to deny the Ministry of Finance’s request for additional administrators highlights the competent management of Thai Airways’ current rehabilitation team. With key restructuring measures approved and a clear path towards financial recovery, Thai Airways is poised to successfully navigate its business rehabilitation process and return to the Bangkok Stock Exchange, marking a new chapter in its history.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com