On Friday, Thailand Prime Minister Prayut Chan-o-cha denied reports that the government, through the Finance Ministry, would allocate approximately USD 1.6B to recapitalize financially struggling Thai Airways International Plc (THAI).
He was responding to reports the carrier would again become a state enterprise through the re-acquisition of the ministry’s majority stake in the airline.
The Prime Minister Prayut said THAI is currently moving through the debt recovery process.
“I have decided that the government will not involve itself in the work of the rehabilitation plan administrators. The government will not provide any financial support. When the rehabilitation plan begins to be implemented, we’ll then decide how to proceed,” Prayut said.
The airline lost its state-owned status last year when the Thailand Finance Ministry reduced its stake to fewer than 50%, to help ease the debt-rehabilitation process.
Previously, several cabinet ministers were concerned the government would need to guarantee a loan worth billions of dollar to boost up THAI if it were to come under the state enterprise umbrella again. Apparently supporting THAI’s reinstatement as a state enterprise were Thailand Finance Minister Arkhom Termpittayapaisith and Deputy Prime Minister Supattanapong Punmeechaow, who also heads the government’s economic team.
They argued reinstatement, which would require the Finance Ministry to become the majority shareholder again, would boost the airline’s financial strength and its bargaining power with creditors. On Wednesday, creditors postponed a vote on THAI’s debt-restructuring plan until next week. The vote, to be held next Wednesday will decide whether the airline, burdened by debts exceeding USD 9.5B, can stay in business. The airline needs more than 50% of creditors to accept its plan.