Bangkok’s Central Bankruptcy Court Has Approved Thai Airways Debt Rehabilitation Plan


THAI has moved closer towards reorganization of some form as the Central Bankruptcy Court in Bangkok has just approved Thai Airways Debt Rehabilitation Plan as agreed to and proposed by the creditors.

There has been no general haircut on debt and THAI can’t look to the government for additional money or even loan guarantees as the State Enterprise Policy Office (SEPO) chief recently said.

THAI is now seeking to restructure 245 billion baht of debt through payment extensions, interest waivers and debt-to-equity conversions.

So far THAI and it’s administrators have refused to ask the creditors to take a haircut on the debt owed to them by the company though with state guarantees off the table and financing through financial institutions difficult it becomes questionable how the carrier wants to procure new loans.

You can read more about it in the Bangkok Post (access here).

The Central Bankruptcy Court (CBC) has accepted Thai Airways International’s (THAI) debt rehabilitation plan containing three amendments made by creditors.

With the plan clearing the first step in court, the financially troubled airline is advancing further in its debt restructuring process.

The airline’s creditors met on May 19 and formally approved the latest plan, which emphasises the state’s role in helping the struggling flag carrier secure vital loans.

Appointed to manage the plan are THAI’s acting president Chansin Treenuchagron, the airline’s independent director Piyasvasti Amranand, deputy finance permanent secretary Pornchai Teerawej, former energy minister Siri Jirapongpan and Kraisorn Baramee-auychai, the former director-general of the Department of Legal Execution.

The airline is seeking to restructure 245 billion baht of debt through payment extensions, interest waivers and debt-to-equity conversions.

The court postponed an earlier hearing after creditors filed two complaints against it to allow planners and creditors to clarify several issues.

Mr Chansin said yesterday the court’s acceptance of the plan effectively formalised the appointment of the five administrators and they would manage the airline’s rehabilitation for at least five years.

He thanked all parties involved and said the airline would emerge from the debt restructuring stronger and more competitive.

Last month, 28 out of the 36 groups, representing 13,000 creditors owed 116 billion baht by the airline, voted in favour of the amended plan.

One change stipulates that THAI should be allowed to operate all its businesses with the same privileges it enjoyed before it ceased to become a state-owned enterprise and entered the debt-rehabilitation process.

The creditors also amended clauses relating to the company’s financial management, which they deemed necessary to facilitate the repayment of outstanding obligations and procurement of fresh loans to maintain the airline’s cash balances.

So the creditors want the government to guarantee for new loans to keep THAI going and service the debt on which they (under a common bankruptcy proceeding) should have taken a substantial haircut on.

The other question is what will happen to the billions of baht that THAI is still owing customers for cancelled tickets. Are they just going to ignore those? Without the carrier formally declared bankrupt and being shed of these liabilities they can hardly get away with just keeping the money if the company continues to exist in it’s current form.

Not sure how they’re thinking this will go down as last month the State Enterprise Policy Office said it’s a no go that the Finance Ministry will guarantee any loans as the Bangkok Post reported

The Finance Ministry will not recapitalise financially troubled Thai Airways (THAI) of which it is the biggest shareholder, the State Enterprise Policy Office (SEPO) chief said.

The remark by SEPO director-general Pantip Sripimol comes amid concerns the carrier will regain the status of a state enterprise through the re-acquisition of the ministry’s majority stake in THAI. …

Ms Pantip insisted the ministry would not seek to recapitalise the airline and was prepared to see its stake diluted if other shareholders bought more shares.

The ministry holds a 49.9% stake in THAI. She said if the ministry injected more funds into the company, it would be akin to attempting to divert money to “fill up the sea”, a move which be hard to justify to taxpayers. …

The Thai Government has just taken on 500 Billion baht in debt through Government bonds “to stem the Covid-19 pandemic” which the PM has to justify in a parliamentary setting this week. I wouldn’t be surprise if China is going to snap these up.


Thai Airways will have to find ways of capitalization that doesn’t involve taxpayer money unless the government does a complete 180 on this. With the current debt load it’s hard to imagine the company being able to secure loans on the free market without guarantees and the only entity that could issue a suitable, sizable guarantee would be the Ministry of Finance which has ruled itself out here.

Apparently the endless saga (nightmare really) of THAI continues for some time to come.