Finance Ministry to spend THB10bn on recapitalising Thai Airways

The debt-to-equity recapitalisation comes under the THAI’s revised rehabilitation plan, which was approved by the Central Bankruptcy Court last week.

Under the rehab plan, the Finance Ministry must maintain at least 40 per cent of THAI's shares. It currently owns a 47-per-cent shareholding in the ailing national carrier.

SEPO is now considering which stocks will be sold to fund the recapitalisation, said its director-general Pantip Sripimol. She expects at least 10 billion baht will be needed to increase the government’s shareholding in THAI.

She added that THAI’s financial performance is improving now that it has resumed flights after pandemic restrictions were lifted.

Since filing for bankruptcy protection, the airline has halved its workforce from over 29,000 to 14,000 and reduced its fleet to 58 aircraft. It forecasts better-than-expected performance with cabin loads at 80 per cent or higher this year.

Pantip predicted THAI would be relisted on the Stock Exchange of Thailand in the latter part of 2024.

Kasikorn Bank (KBank) also expects THAI's performance to improve as operating costs fall and tourism recovers. KBank forecasts the carrier’s earnings will rise to 40 billion baht in the fourth quarter of this year from 21 billion baht in the second quarter.

However, it predicts performance losses until 2024 due to rising fuel costs.

"It depends on how THAI deals with fuel and flight ticket prices to gain profit," a KBank analyst said.

The airline filed for bankruptcy protection in late 2019 after reporting massive debts of 245 billion baht. The rehab plan was given the green light by Cabinet in May 2020 before being approved by the Central Bankruptcy Court. The rehab plan was then revised following a better-than-expected performance by the airline.