The government plans to increase its stake in Thai Airways International (THAI), but it will not revert the struggling airline to state enterprise status, according to a cabinet source.
This decision to boost the government’s share was approved during a mobile cabinet meeting in Chiang Mai on Friday, where Finance Minister Pichai Chunhavajira discussed THAI’s debt restructuring progress.
Prior to the meeting, THAI anticipated raising up to 44 billion baht through a share rights offering, which is a critical step before the airline can exit its court-supervised debt restructuring and allow for the resumption of its stock trading.
As per the exchange filing on November 24, the airline set a share price of 4.48 baht for its 9.82 billion new shares available to existing shareholders, with each stockholder entitled to purchase 4.5 new shares.
During the cabinet meeting, it was stated that the Finance Ministry aims to maintain its status as the largest shareholder of the airline while preserving THAI’s role as the national flag carrier, without taking direct control.
However, the ministry does not need to increase its shareholding in the airline, as it currently holds 47.9% of THAI’s shares. Following the conversion of debt into equity and a capital injection, the combined ownership of the ministry, the Vayupak Fund, and Government Savings Bank (GSB) would be around 40% of THAI shares.
At this level, the government’s collective stake will not lead to the airline being classified as a state enterprise.
During the mobile cabinet meeting, Mr. Pichai noted that the Council of State, the government’s legal arm, has approved the recapitalization as a viable and legally acceptable element of the debt restructuring process.
However, there has been some debate regarding the ministry’s legal authority to vote for the appointment of two senior officials to the airline’s debt restructuring board. The vote was conducted on Friday during the creditors’ meeting, where the ministry participated as a creditor despite objections from several other creditors who argued that the ministry had transitioned from creditor to shareholder due to the debt-to-equity swap.
Bankruptcy protection officials clarified that the swap has not yet been finalized, meaning the ministry remains a creditor for the time being and retains the right to vote.
THAI’s creditors have agreed to convert approximately 53 billion baht of debt into shares after the subscription period ended earlier last month. The airline expects to complete its rehabilitation by February 2025 and to resume trading on the stock exchange by May 2025.
