Thai Airways Prepares to Exit Rehabilitation with New Plans
Thai Airways is set to take significant steps towards exiting its four-year-long rehabilitation plan, as it prepares to file essential paperwork with the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) on September 30. This pivotal move comes after the Central Bankruptcy Court approved the airline’s rehabilitation plan on October 20, 2022.
Steps Towards Recovery
The airline has faced considerable challenges since entering rehabilitation on September 14, 2020. Over this period, it implemented a rigorous austerity plan, resulting in a workforce reduction from 30,000 employees to approximately 15,000. This strategy was crucial in curbing losses and enhancing operational efficiency.
Chai Iamsiri, CEO of Thai Airways, remarked, “We are confident this will restore investor confidence in Thai Airways after exiting the rehabilitation plan.” The upcoming filing will include a comprehensive capital restructuring plan consisting of 2,000 pages of business details and aircraft procurement strategies.
Debt Conversion and Investor Confidence
As part of its recovery strategy, Thai Airways has engaged in discussions with various creditor groups, including cooperatives and financial institutions. Many creditors support the rehabilitation plan and will likely convert their debt into equity. The successful completion of this process is contingent upon several criteria, including increasing registered capital and achieving a minimum EBITDA of 20 billion baht over the two years preceding the reporting of the plan’s success.
Dr. Piyasvasti Amranand, Chairman of the Rehabilitation Plan, highlighted the need for this transformation: “The debt-to-equity conversion is essential to the rehabilitation plan.” Investors participating in this conversion will face a one-year lock-up period to prevent excessive selling pressure once trading resumes.
The Road Ahead
The timeline for Thai Airways’ restructuring is clearly defined. Following the SEC filing, creditors will indicate their intention to convert debt into equity in November. The company anticipates offering shares to previous shareholders, employees, and private placements by December.
With hopes to re-list on the SET by the second quarter of 2025, Thai Airways aims to solidify its position in the market post-rehabilitation. The company’s total liabilities stood at 200 billion baht as of September 2020, and the airline has already seen a positive shift, reporting a net profit of 2.7 billion baht in the first half of 2024.
Conclusion
In summary, Thai Airways is on the brink of a significant transformation, aiming to exit its rehabilitation plan and restore investor confidence. The forthcoming filing with the SEC and SET marks a crucial step in the airline’s journey towards recovery and a return to normalcy in the competitive aviation market.
