Shareholders mull THAI’s capital bid

Thai Airways International’s (THAI) shareholders have yet to decide if they want to inject more capital into the company, in line with its rehabilitation plan, as the company’s financial situation has improved.
However, most creditors including the Finance Ministry, a major shareholder in the airline, are prepared to convert debt to equity as outlined in the company’s conversion plan, said Tibordee Wattanakul, director-general of the State Enterprise Policy Office (Sepo).
Mr Tibordee said THAI is expected to exit its rehabilitation plan by mid-February 2025 and resume trading on the stock exchange around May 2025, as it has successfully met all the plan’s requirements.
Thai Airways is no longer classified as a state enterprise.
“The Finance Ministry and Sepo are reviewing the need for an additional capital injection into Thai Airways,” he said.
“The company’s performance has been consistently good, prompting shareholders, including the ministry, to reconsider whether a further capital infusion is necessary.”
The airline is urging shareholders to pass the capital injection.
According to the ministry’s plan, around 12.5 billion baht would be set aside for the national carrier’s capital increase.
Mr Tibordee said the decision is being considered and requires further review from all airline shareholders.
If shareholders agree with the ministry proposal to inject 12.5 billion baht into the airline, the ministry’s shareholding would increase to roughly 41%, up from 40%.
As for creditors, there are terms within the agreement that need to be reconsidered, such as the debt-to-equity conversion that specifies 100 baht worth of creditors’ debt must be converted into 24.5% equity, while the remaining 75.5% is at the discretion of the creditor to decide whether to convert.
Most creditors are expected to exercise this option, as the carrier’s improved performance would allow them to receive returns more quickly than waiting for debt repayment.
By converting debt to equity, they could potentially sell their shares if the stock price rises, rather than waiting for up to a decade for the company to fully repay the debt.
Even the Finance Ministry is expected to convert 100% of its debt into equity.
Mr Tibordee also addressed reports of opposition from the airline’s creditors regarding representatives of the Finance and Transport ministries being appointed as administrators of the airline’s rehab plan.
He said these appointments were not politically motivated, noting the Finance Ministry representative comes from Sepo and the Transport Ministry appointee comes from the Office of Transport and Traffic Policy and Planning.
Both are considered to be knowledgeable and capable of assisting in the management of the rehabilitation plan, said Mr Tibordee.
The Finance Ministry sought to add these administrators to provide a micro-level of focus on securities and the company’s valuation, he said.
Mr Tibordee said he believes creditors are not in opposition to the appointments, instead wanting more time to consider them.
“Whether the additional appointments are seen as political representatives is open to interpretation,” he said.
“With the government holding a 40% stake in Thai Airways, it would be difficult to deny such involvement entirely.”