Adding two new managers for THAI rehabilitation plan is ‘necessary’
Finance Ministry dismisses concerns its decision risks politicising the national airline while setting lower price for rights offering
The Finance Ministry has defended its decision to add two new managers to take charge of the business rehabilitation plan for Thai Airways International (THAI), saying that the move is necessary to ensure the rest of the plan is followed.
The two new managers will also help the national flag carrier in making key decisions regarding future operations more efficiently, THAI CEO Chai Eamsiri has said. He was quoting the letter from the ministry detailing the reason for seeking an amendment to the business rehabilitation plan submitted to the Stock Exchange of Thailand on September 13.
According to a source, the Finance Ministry is planning to exercise its right as the major debtor of THAI to propose the amendment to the rehabilitation plan by adding two new managers during the meeting of debtors of the airline on Friday (November 8).
The new candidates are Polchak Nimwatana, deputy director of the State Enterprise Policy Office (SEPO), under the Finance Ministry, and Panya Chupanich, director of the Office of Transport and Traffic Policy and Planning (OTP), under the Transport Ministry.
The move comes following the resignations of two of the five managers, leaving just three in place, namely former Energy Minister Piyasvasti Amranand, Fiscal Policy Office (FPO) director Pornchai Thirraveja, and former THAI president Chansin Treenuchagron.
The move however has raised concern among investors and analysts that with two managers coming from the Finance Ministry, it would influence the setting of the price of the debt-to-equity swap in a way that would benefit the debtors.
Meanwhile, a source reported that some of the debtors are also concerned that new managers would set the price of THAI’s shares too low during the rights offering scheduled for December, which would result in the funds raised being lower than anticipated.
It is also believed that the rehabilitation managers will be considered as candidates for the soon to be appointed new board of directors, thus further raising concerns that the airlines’ management could be influenced by political offices.
In the letter submitted to SET, the ministry reasoned that THAI needs experts who could connect with shareholders after leaving the rehabilitation plan, as well as coordinate with related government agencies to ensure smooth operations.
The ministry’s proposal will need to be approved by majority vote at the meeting of debtors on Friday, which gets underway at 10am.
THAI filed for bankruptcy protection in late 2019 after reporting massive debts of 245 billion baht. In May 2020, the Cabinet gave the rehabilitation plan the green light under the Bankruptcy Act, and this was later approved by the Central Bankruptcy Court in June 2021.
After meeting the revenue target this year, the airline is preparing to issue rights offering to help with the business rehabilitation process.
