Thai Airways eyes capital restructuring with new share offering

The shares will be offered to existing shareholders, employees and limited individual buyers, the airline said in a statement on Monday.

The national carrier filed a registration statement with the Securities and Exchange Commission (SEC) and SET as part of its ongoing business rehabilitation plan.

To bolster shareholders’ equity, Thai Airways (THAI) is pursuing several measures as part of its capital restructuring strategy:

• Converting existing debts into new ordinary shares (Mandatory Conversion), totalling up to 14.86 billion shares.
• Allocating up to 4.91 billion newly issued ordinary shares to support voluntary conversion of existing debt.
• Issuing up to 1.90 billion new shares to support voluntary conversion for plan creditors.

Piyasvasti Amranand, chairman of the airline's debt rehabilitation administrator, stated that THAI has made significant progress in implementing its business rehabilitation plan, which includes strengthening corporate management and achieving financial stability.

“Thai Airways has been rigorously implementing its business rehabilitation plan, including streamlining corporate management to enhance operational efficiency,” he said.

The airline reported an EBITDA of 29.29 billion baht for the June 023 to June 2024 period, with no defaults recorded. The next crucial step is to accelerate the capital restructuring plan, which must be completed by December 31.
 

Cherdchome Therdsteerasukdi, THAI’s chief finance and accounting officer, revealed that the Central Bankruptcy Court has approved amendments to the business rehabilitation plan. 

These amendments include an increase in registered capital to support the conversion of existing debts into new shares, voluntary conversion of debt into shares, and the conversion of new interest into capital.

The capital restructuring process can be detailed as follows:

• The Finance Ministry, as a Group 4 creditor, will receive full outstanding principal repayment, totalling 12.83 billion baht.
• Creditors in Groups 5, 6, and 18-31 (debenture holders) will receive 24.50% of their outstanding principal debt through conversion into newly issued shares.

To ensure stability in THAI’s stocks after relisting, the management has implemented a one-year lock-up period. This measure prohibits creditors who receive the newly issued shares from selling them for one year after the company’s relisting on the SET.

The entire capital restructuring process is slated for completion by the end of 2024. Once the 2024 financial statements are submitted to the SET in early 2025, the airline expects to file a petition with the Central Bankruptcy Court to terminate the business rehabilitation process within the second quarter of 2025.