Thai Airways to issue new shares worth 42 billion baht

Thai Airways International Plc (THAI) is set to issue new shares valued at a minimum of 42 billion baht by December, marking a significant move towards concluding its court-monitored debt restructuring and resuming trading on the Stock Exchange of Thailand (SET).

The national airline plans to offer 6.81 billion new shares to creditors as part of a debt-to-equity swap, as detailed in a regulatory filing with the SET and the Securities and Exchange Commission yesterday, October 1. Each share is priced at 2.5452 baht, bringing the total value of this offering to 17.3 billion baht.

An additional 9.82 billion new shares will be made available to existing shareholders, employees, and other investors through a private offering. Although the filing did not specify the price, a separate statement confirmed that these shares would not be priced below 2.5452 baht each. The company aims to complete the share issuance by the end of the year.

THAI has also allocated 14.9 billion new shares for a mandatory debt-to-equity swap with its major creditors, including the Ministry of Finance. The ministry will convert approximately 12.8 billion baht of its debt into new shares, with the remaining shares allocated to other creditors.

The airline is targeting an exit from its court-monitored debt-restructuring plan by 2025, five years after filing for bankruptcy protection. THAI has been suffering operational losses annually since 2013, exacerbated by the Covid-19 pandemic, which led to its petition for protection from the Central Bankruptcy Court.

Since 2023, THAI has seen improved earnings and cash flows, driven by a post-pandemic travel surge. This financial recovery has enabled the airline to order new Boeing and Airbus jets to expand its services to new routes and enhance local operations.

Fleet expansion

Chief executive officer Chai Eamsiri revealed plans to expand the fleet to 116 aircraft by 2027, surpassing its pre-Covid size of 103. The airline expects to be operating 79 jets by the end of 2024.

“The debt-to-equity swap and new share offering will help Thai Airways achieve its debt restructuring process by turning shareholders’ capital into a surplus,” Piyasvasti Amranand, chairman of the court-appointed committee overseeing the airline’s rehabilitation, stated.

Shareholders’ equity had a deficit of about 40 billion baht as of June 30.

The airline’s improved finances and capital-raising strategy are anticipated to expedite the resumption of trading in its shares by 2025, which have been suspended since May 2021.

Following February, THAI plans to submit a request to exit the rehabilitation plan with the Central Bankruptcy Court. The company expects its shares to recommence trading on the SET in the second quarter of next year.

During the rehabilitation, the airline reduced its workforce by half to approximately 10,000 employees. It also scaled back unviable and unprofitable routes and reduced its fleet from nearly 100 aircraft to 64 by the end of 2022. Additional revenue was generated from the sale of planes and other assets, including the THAI Catering food division.

In the first half of 2024, THAI reported a net profit of 2.7 billion baht on revenue of 89.9 billion, reflecting a 14% increase compared to the same period the previous year, reported Bangkok Post.