Creditors of Thai Airways International (THAI) on Thursday approved a new rehabilitation plan in what the airline called a major step forward on its flight back to full recovery.
In a statement to the Stock Exchange of Thailand, THAI said participating creditors holding 78.59% of the company’s total debt voted for the plan, which it had originally submitted on July 1. The creditors’ meeting was conducted online by the Official Receiver.
The result will now be reviewed by the Central Bankruptcy Court, which has scheduled a hearing on Sept 14, the airline said.
THAI said the approval showed the confidence of the creditors in supporting the airline as it charts a new and more sustainable course.
“This is a significant step in laying the foundation for THAI’s growth and profit-making capability in the future for sustaining THAI as the national flag carrier to support and promote the recovery of the Thai economy and society,” it said.
The amended plan submitted to the Central Bankruptcy Court in July included a plan to borrow 12.5 billion baht over six years and another 12.5 billion in the shorter term.
It also calls for debt-for-equity swaps totalling 37 billion baht, or about 25% of its more than 100 billion baht in debts.
Piyasvasti Amranand, chairman of the THAI panel overseeing the court-monitored debt plan, said on July 1 that the amended version was needed after the airline reported a better-than-expected recovery from the financial crisis.
In the previous plan, THAI expected to face a cash deficit of 50 billion baht and therefore planned to borrow 25 billion from state-owned lenders and the rest from private financial institutions.
However, since the airline realised it would be difficult to successfully obtain the full amount of loans required, it first tried to find more cash by selling a number of assets and old aircraft, which has brought in more than 9 billion baht.
Mr Piyasvastii told the Bangkok Post on Tuesday that he expected the revised version to get approval from the creditors and called it a crucial step in the airline’s financial recovery.
The national carrier has undergone a massive downsizing as part of a plan to bring its headcount and fleet size more in line with business expectations.
Staff numbers have been reduced from 29,000 to 14,400 at present, including 3,800 crew members and about 900 pilots, lowering the payroll from 2 billion baht a month to about 700 million.
THAI has also downsized its fleet from 103 planes to 61, of which 20 belong to subsidiary Thai Smile.
