Government pulls off a narrow victory at THAI creditors’ meeting
Secures narrow backing for adding two state officials as rehabilitation plan administrators
In a victory for the government, the Ministry of Finance managed to secure a narrow backing for adding two state officials as rehabilitation plan administrators at the Thai Airways creditors’ meeting on Friday.
The creditors’ committee of Thai Airways International Pcl (THAI) revealed that at Friday’s meeting, three key amendments to the rehabilitation plan were discussed and approved:
Reducing par value of shares: A proposal to reduce the par value of shares to offset accumulated losses, which currently amount to approximately 60 billion baht. This was approved by 87%, with 13% opposing the move.
Debt repayment to creditors: A proposal to repay creditors under the rehabilitation plan ahead of schedule, with a payment amount not less than the dividends proposed to be paid to shareholders in that period.
Appointment of additional rehabilitation plan administrators: A proposal to add two administrators – Panya Chupanich, director of the Office of Transport and Traffic Policy and Planning at the Ministry of Transport, and Polchak Nimwatana, deputy director of the State Enterprise Policy Office, Ministry of Finance. The proposal was approved by 50.4% of creditors and 49.6% opposed it.
The approval margin was slim, with about 800 million shares in favour. Some creditor groups objected to the Ministry of Finance's voting rights, arguing that its debt-to-equity conversion was 100% completed, thus making the ministry a shareholder rather than a creditor.
However, the official receiver determined that the conversion process was not finalised as the capital increase was yet to be registered, which allowed the ministry to retain creditor status temporarily.
The amendments will be submitted to the Central Bankruptcy Court for approval, along with the plan of appointing additional administrators. The court is scheduled to consider the matter on December 12. If approved, THAI will have a total of five rehabilitation administrators.
The key next steps include nominating suitable candidates to serve on THAI’s board of directors and overseeing the company’s operations after exiting the rehabilitation process.
Piyasvasti Amranand, chairman of THAI’s Rehabilitation Plan Administrators, expressed concern following the meeting. He noted that the addition of state representatives as plan administrators could impact investor confidence.
During recent roadshows to attract investors for the company’s capital increase, concerns about political interference were frequently raised. These developments may affect the planned capital increase in December, he said.
If the capital increase fails to meet its target and the shares are not fully sold by December 30, the unsold shares will be forfeited, leading to lower-than-expected new capital for THAI.
