Flag carrier Thai Airways International Pte. Ltd. was confident that it will secure the nod of the bankruptcy court for its request to restructure debt amounting to 245 billion baht.
A report by the Bangkok Post over the weekend said that Thai Airways was expecting the court to accept its restructuring request and appoint a committee to design the rehabilitation plan.
“We have not had any obstacles so far because creditors have been cooperative,” Thai Airways legal advisor Kitipong Urapeepatanapong told the company’s shareholders on Friday.
It can be recalled that the airline in May officially sought rescue from the court to revive the company following a series of net losses for three consecutive years. The plan was formally endorsed upon the decision of Thai Prime Minister Prayut Chan-o-cha and the members of the Cabinet.
The State Enterprise Committee, which oversees policies for state-owned companies and is chaired by the prime minister himself, originally planned to grant the airline a short-term loan backed by the Ministry of Finance. It later withdrew the proposal.
The latter is the carrier’s controlling owner, having owned 51 percent of its shares.
Meanwhile, the court accepted the petition, automatically giving the company a stay on debt repayments to restrict creditors from pursuing Thai Airways for amounts owed to them. The first hearing was scheduled for August 17.
The court will then appoint an executor to draft a business rehabilitation plan. While the debtor is expected to nominate a candidate to draft a restructuring plan, its creditors would have the power to object if they deem the person not suitable.
It can be recalled that Thai Airways posted net losses in the years 2008, 2011, 2013, 2014, 2015, 2017, 2018, and 2019. As of December 31, its total liabilities were at $7.6 billion, while total assets stood at $8.03 billion. Shareholders’ equity was only at 11 billion baht, or equivalent to only 4.6 percent of the company’s total assets.
Restructuring of the company was expected to take up to seven years.