Thai Airways rehabilitation plan accepted by Bankruptcy Court
The debt rehabilitation plan of Thai Airways International has been accepted by Thailand’s Central Bankruptcy Court, paving the way for the survival of the company. The CBC’s acceptance of the plan is the first step in the debt restructuring process for the struggling airline. In this plan, the state would play an instrumental role in aiding Thai Airways to get loans.
The plan was hashed out with the airline’s creditors on May 19, when they held a meeting to officially greenlight the plan, but just now gained approval by the CBC. The process would involve 2 executives for the airline, a government official and 2 more former government officials.
The acting president and the independent director of Thai Airways would work alongside Thailand’s Deputy Finance Permanent Secretary as well as a former Energy Minister and a former Director-General of the Department of Legal Execution. These 5 administrators have been formally appointed to oversee Thai Airways’ rehabilitation and restructuring for a minimum of the next 5 years, now that the CBC accepted the proposal.
Earlier iterations of the plan had been met with 2 complaints by creditors, which stalled legal proceedings. This caused the court to postpone the hearing to allow more time for clarifications and revisions. The plan approved had 3 amendments by creditors, with 28 out of the 36 groups representing all creditors voted in favour of the revised plan after the May meeting.
The Federation of Savings and Credit Cooperatives of Thailand had requested a few changes that were approved by the creditors, who also said that to get new loans and make payments on existing debt, Thai Airways’ financial management would need the amendment they proposed. Finally, as an aid to the troubled airline, a clause was added allowing Thai Airways to operate with the same privileges afforded as the state-owned agency it was previously before it began debt rehabilitation.
Thai Airways is carrying 245 billion baht of debt to about 13,000 creditors and now plans to restructure that debt through a number of financial manoeuvres including interest waivers, debt-to-equity conversions and payment extensions. The airline’s acting president released a statement thanking all the involved parties and vowing a stronger and more competitive airline would arise from the debt restructuring.
SOURCE: The Phuket News
