With no more flights to the US, THAI may not need to seek protection under Chapter 11
Thai Airways International (THAI) may not need to seek protection under Chapter 11 of the Bankruptcy Code in the United States, a senior official said after a meeting led by Deputy PM Wissanu Krea-ngam on Monday (June 1) with senior THAI officials and the airline’s board.
The meeting was held to discuss the airline’s rehab plan after the Central Bankruptcy Court accepted its bankruptcy protection case on May 27.
Prapas Kong-led, director general of the State Enterprise Policy Office, said the airline will send copies of the rehabilitation petition to its creditors, passengers who seek refunds on their tickets and members of the Royal Orchid Plus frequent flyer programme.
As of last year, THAI’s total debts were worth Bt147.4 billion, with the largest chunk or Bt74.1 billion owed to investors holding its debentures, followed by Bt46.5 billion owed for the leasing of planes and euro-denominated loans worth about Bt11.9 billion.
If creditors allow the rehab process to go via Thai courts, then THAI will not need to seek bankruptcy protection in the US, he said.
According to its legal adviser, THAI may not need to file bankruptcy in the US as it does not have any assets in the United States and it is not scheduling any flights to the US either. Hence, there is no risk of its airplanes being seized by creditors there.
However, the legal advisers said, the airline may need to file legal cases in other countries where it has assets and operates flights, so it can protect its planes from being confiscated by creditors.
Airplanes operated by THAI are divided into two groups – those owned by the airline, and those leased from other companies.
The creditors of the leased planes may exercise their right to seize the aircraft if they do not agree with the rehab plan. Other creditors, however, cannot take the planes unless they file and win a lawsuit.
“Our priority is to convince foreign creditors that they should accept the airline’s rehabilitation under Thailand’s Bankruptcy Court,” Prapas added.