Top Shareholder Questions Thai Airways’ Capital Injection Plan

Thai Airways International’s largest shareholder, the Ministry of Finance, is reconsidering the need for a capital increase, citing the airline’s improved financial performance, according to The Bangkok Post. The capital raise, part of the carrier’s rehabilitation process, aims to generate THB80 billion ($2.3 billion) through a mix of bond issuance and debt-to-equity conversion.

The ministry, holding a 47.86% stake, had allocated THB12.5 billion ($359 million) for the planned capital increase. However, Tibordee Wattanakul, director-general of the State Enterprise Policy Office, stated that the ministry and other stakeholders are reviewing the necessity of additional funding.

“The company’s consistent profitability is prompting shareholders, including the ministry, to reassess the need for further capital infusion,” Wattanakul said.

Thai Airways recently posted a THB12.48 billion ($360 million) net profit for Q3 2024, bolstering confidence in its recovery. Despite this, the airline’s administrators remain in favor of the capital raise as part of the restructuring strategy.

The Ministry of Finance, owed THB12.83 billion ($368.5 million) by the airline from pre-pandemic loans, plans to convert all its debt into equity under the rehabilitation plan. However, the ministry’s stake will decrease to 35.81% following the restructuring.

Adjustments to the debt-to-equity swap ratio, initially set at 24.5%, are being considered to expedite shareholder returns. Thai Airways aims to exit rehabilitation and resume public trading on the Bangkok Stock Exchange by 2025.

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