Prime Minister Prayut Chan-o-cha on Friday denied reports that the government, through the Finance Ministry, would allocate 50 billion baht to recapitalise financially struggling Thai Airways International Plc (THAI).
He responded to reports the carrier would again become a state enterprise through the re-acquisition of the ministry’s majority stake in the airline.
The prime minister said THAI is currently moving through the debt rehabilitation process.
“I have decided that the government will not involve itself in the work of the rehabilitation plan administrators.
“The government will not provide any financial support. We’ll decide how to proceed after the implementation of the rehabilitation plan begins,” Gen Prayut said.
The airline lost its state-owned status last year when the Finance Ministry reduced its stake to under 50% to help ease the debt-rehabilitation process.
Previously, several cabinet ministers were concerned the government would need to guarantee a loan worth billions of baht to prop up THAI if it were to come under the state enterprise umbrella again.
Reportedly supporting THAI’s reinstatement as a state enterprise were Finance Minister Arkhom Termpittayapaisith and Deputy Prime Minister Supattanapong Punmeechaow. The Deputy Prime Minister also heads the government’s economic team.
They argued reinstatement would boost the airline’s financial strength and its bargaining power with creditors. However, it would require the Finance Ministry to become the majority shareholder again.
Vote on THAI Airline debt restructuring delayed
On Wednesday, creditors postponed a vote on THAI’s debt-restructuring plan until next week.
The vote, to be held next Wednesday, will decide whether the airline can stay in business. The airline needs more than 50% of creditors to accept its plan. The airline has debts exceeding 300 billion baht.
Pantip Sripimol, director-general of the State Enterprise Policy Office, said ten creditors called for the plan to be amended, causing the vote to be delayed.
One issue involves getting the Finance Ministry to guarantee loans for the airline. This action would make it easier for it to borrow and more viable to sustain the company. The Finance Ministry is still THAI’s biggest shareholder.
However, before the ministry can act as a loan guarantor, it must boost its take back to over 50%. This action would make THAI a state enterprise again.
Calls to reinstate the Finance Ministry as the majority shareholder has come under fire. Critics fear it would be too much of a financial burden. Their concern is for the economic issues due to the Covid pandemic.
Currently, the ministry and the Government Savings Bank together hold 49.9% of THAI’s shares.
The airline is reportedly seeking a deferment of bond repayments for six years and a waiver of unpaid loan interest. It suffered a record loss of 141 billion baht last year.