The State Enterprise Policy Office has said the government will not support a billion baht infusion of funds for Thai Airways. The national airline is currently the subject of bankruptcy proceedings.
SEPO’s Pantip Sripimol said Thailand’s finance ministry would not recapitalize the carrier, although it remains its largest shareholder. The Bangkok Post reports that Thai Airways could become a state-owned company again if the ministry again takes a controlling stake.
Last September, the finance ministry cut its stake in the national airline to less than 50%, in an effort to ease the debt rehabilitation process. As a result, the carrier is no longer a state-owned enterprise and it is understood that a number of ministers are concerned that if the airline regains its status as a state-owned enterprise, the government should guarantee a loan of a billion baht to guarantee its survival.
The Bangkok Post reports that Finance Minister Arkhom Termpittayapaisith and Deputy Prime Minister Supattanapong Punmeechaow both support reestablishing the airline as a state-owned enterprise. They claim it would improve his financial situation and give him more leverage to negotiate with creditors. Such a decision would mean that the Ministry of Finance would once again become a majority shareholder.
As it stands, the airline’s bankruptcy proceedings have started with renegotiation with creditors – mainly aircraft renters. The majority of the Thai Airways fleet remains grounded and collects dust, parked at Suvarnabhumi airport.
However, Pantip says the ministry will not recapitalize the airline and is prepared to reduce its stake if other investors buy additional shares. The ministry currently owns a 49.9% stake in Thai Airways, with Pantip saying it would be difficult to justify a further injection of liquidity to shareholders.
With the airline now operating as a private company, the government is no longer obliged to support it financially, and the Ministry of Finance is no longer obliged to offer financial assistance to a private company, although it is its principal shareholder.
Creditors will meet on Wednesday to discuss the airline’s debt restructuring plan and decide whether to accept it.
SOURCE: Bangkok Post
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