Recapitalisation a key part of THAI's revised rehabilitation plan

The Cabinet gave the green light for THAI to undergo rehabilitation under the Bankruptcy Act in May 2020, while the airline’s protection filing was granted by a court in June last year.

The Finance Ministry and state enterprises will still have 40 per cent shareholding in the company under the revised plan.

Details of the revised rehabilitation plan are as follows:

1. Procuring loans and/or bonds with a period of no more than six years, totalling no more than 12.50 billion baht. THAI has also prepared a revolving credit facility for the same amount as a backup plan.

2. Increasing registered capital to approximately 31.50 billion shares to boost THAI's financial structure and enable its shares to be traded on the Stock Exchange of Thailand (SET) again:

• Allowing new loan subscribers to purchase newly issued ordinary shares equal to the company's drawdown amount of 12.50 billion baht.
• Allocating newly issued ordinary shares for repaying debt. All debt the company owes the Finance Ministry, which is the company's creditor and main shareholder, will be converted into equity. Meanwhile, 24.5 per cent of the company's debt with creditors who hold the company's debentures will be converted into equity, while the remaining 75.5 per cent of debt will be repaid using the company's cash flow in line with the original plan. This plan to change debt into equity will enable THAI to reduce debt by approximately 37.80 billion baht.
• Allocating newly issued ordinary shares to support the conversion of debt from interest into equity at 2.5452 baht per share. This will enable THAI to reduce debt from interest by approximately 4.84 billion baht.
• Offering newly issued ordinary shares at a price that the rehabilitation plan administrator deems appropriate and not less than 2.5452 baht per share to existing shareholders based on their shareholdings. In case the newly issued ordinary shares are not fully subscribed, the remaining shares will be offered in private placement. This move is expected to enable the company to raise funds of approximately 25 billion baht.

The revision of THAI's rehabilitation plan is expected to be completed within 2024. If the plan succeeds, THAI's equity will be on positive trajectory in 2024, while the company's shares could be traded on the SET in 2025.

"This move aims to boost confidence among creditors in line with aviation business recovery and boost THAI's growth in revenue," the company said.

THAI has witnessed exponential growth in revenue since November 2021. The average number of passengers using THAI and its subsidiary airline, Thai Smile Airways, from June 1-27 this year has increased to 12,568 and 12,257, respectively, compared to 269 and 4,929 between April and October last year.

THAI's cabin factor from June 1-27 this year has risen to 75 per cent, while its booking rate in the third quarter this year has risen significantly after the country’s reopening.