Bangkok Post reports that a government panel is stepping up to help debt-ridden Thai Airways International Plc (THAI) pass any regulatory and contractual hurdles ahead of the national carrier’s planned debt rehabilitation, according to Prapas Kong-Ied, director-general of the State Enterprise Policy Office (Sepo).
A state-appointed committee following up on the airline’s rehabilitation, headed by Deputy Prime Minister Wissanu Krea-ngam and with Mr. Prapas sitting as a member, will arrange the help, he said, Bangkok Post relays.
According to the report, the troubled airline turned to the government because it has many contracts with trading partners and legal obligations that can only be resolved with the state’s help.
These problems should be cleared before THAI enters rehabilitation, Mr Prapas said on June 4.
Bangkok Post relates that Mr. Prapas said the airline formally asked the Wissanu committee to coordinate with the government during a meeting on June 8 when THAI acting president Chakkrit Parapuntaku presented a progress report on the carrier’s rehabilitation plan which will next go to the Central Bankruptcy Court (CBC).
THAI needs to stay in business to generate revenue and pay off THB244.9 billion of outstanding debt to national and international creditors, the report says.
The airline will address the court and try to convince creditors the rehabilitation plan will work, Mr. Prapas said.
Bangkok Post says the airline specifically needs the government’s help in reallocating slots for its flights.
The Transport Ministry will have a say on what could be done in this area, Mr. Prapas added.
According to Bangkok Post, Mr. Prapas said the Foreign Affairs Ministry will notify the authorities in countries where THAI provides services about the airline’s rehabilitation before the bankruptcy court.
This will prevent THAI’s aircraft from being impounded by overseas creditors.
Currently, 31 of its aircraft are on financing leases and another 39 are on operating leases, the report notes.
Bangkok Post adds that the Wissanu panel will take up the issue with the Foreign Affairs Ministry which will appeal to foreign countries where THAI is present to help prevent its aircraft being seized by creditors.
The ministry will explain that THAI has been covered by an automatic stay order since it filed for rehabilitation under the kingdom’s bankruptcy law, he said.
The Wissanu panel will try to remove potential legal quagmires for THAI and reinforce its defence during rehab proceedings in court, Mr. Prapas, as cited by Bangkok Post, said.
“We will do what we can to clear up issues so the rehab plan can go ahead,” Mr. Prapas said, insisting the follow-up panel will act only as a facilitator.
About Thai Airways
Thai Airways International PCL (BAK:THAI) is the national carrier of Thailand. The company provides air transportation, freight and mail services on domestic and international routes including Asia, Europe, North America, Africa and South West Pacific. The Company is a state enterprise which is controlled by the government and partly owned by the public.
As reported in Troubled Company Reporter-Asia Pacific on May 21, 2020, Reuters said Thailand’s cabinet approved a plan to restructure troubled Thai Airways International Pcl’s finances through a bankruptcy court, the Southeast Asian country’s prime minister said on May 19. The plan for a court-led restructuring of the national carrier replaces a previous proposal of a government-backed rescue package that was heavily criticised in the country.
Thai Airways posted losses every year after 2012, except in 2016. In 2019, it reported losses of THB12.04 billion.