Cabinet approves plan for bankruptcy court-led restructuring of Thai Airways

FILE PHOTO: Workers service a Thai Airways Airbus A380-800 aircraft at Bangkok International Suvarnabhumi Airport, Thailand September 3, 2019. Picture taken September 3, 2019. REUTERS/Amr Abdallah Dalsh

Thailand’s cabinet approved a plan to restructure troubled Thai Airways International Pcl’s finances through a bankruptcy court, the Southeast Asian country’s prime minister said on Tuesday.

The plan for a court-led restructuring of the national carrier replaces a previous proposal of a government-backed rescue package that was heavily criticised in the country.

The airline’s troubles are the latest example of how the coronavirus pandemic is crippling the global airline industry.

Colombia’s Avianca Holdings SA and Virgin Australia Holdings Ltd have filed for bankruptcy protection since the pandemic broke out.

Thai Airways, though, had been in trouble even before the outbreak of the coronavirus due to stiff competition from budget airlines and bloated costs.

It posted losses every year after 2012, except in 2016. In 2019, it reported losses of 12.04 billion baht ($377.3 million).

“We have decided to petition for restructuring and not let Thai Airways go bankrupt. The airline will continue to operate,” Prime Minister Prayuth Chan-ocha told reporters at a news briefing.

If the request is accepted by the bankruptcy court, Thai Airways would be given an automatic stay restricting legal action from creditors.

“The Cabinet also agreed the government will reduce its holding in Thai Airways to under 50%, ending the airline’s status as a state-enterprise”, Transport Minister Saksayam Chidchob told reporters.

Thai Airways said the plan will be implemented through the Central Bankruptcy Court and it would operate as usual as the restructuring took place.

Thai Airways will not be dissolved or go into liquidation or be declared bankrupt,” Thai Airways Acting President Chakkrit Parapuntakul said in a statement.

Operations including passenger and cargo transportation will continue in parallel with the plan, he said.

Thai Airways shares surged 16.6% on Tuesday, but are still down by about a third this year.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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