BANGKOK: The Thai Government has sold a 3.2% stake in national carrier THAI Airways according to a filing listed with the SEC on Friday, May 22. The stake of 69.2 million shares was sold to the Vayupak 1 mutual fund run by Krung Thai Bank. The government’s stake is now 47.86%, ending THAI Airway’s days as a majority-owned state enterprise.
“The Cabinet agreed the government will reduce its holding in Thai Airways to under 50 percent, ending the airline’s status as a state-enterprise,” Saksayam Chidchob, Thailand’s Transport Minister said last week.
“We’ve extensively covered the financial woes of THAI Airways at Simple Flying” he added.
With the exception of 2016, the airline has posted losses since 2012 and carries debts of approximately $2.9 billion. In 2019, THAI Airways lost $376 million. In the first half of 2020, the airline is expected to lose around $565 million.
Currently, THAI Airways has suspended all international flying. The airline is running some limited domestic flights. But with no real relief on the horizon, the Thai Government is moving to restructure the airline while under formal bankruptcy protection.
By seeking the protection of a formal restructuring process, THAI Airways can prevent its assets and aircraft from being seized by creditors. Friday’s SEC filing protects its assets and aircraft in the United States. Some 35% of THAI’s creditors are based in the United States.
However, as a majority state-owned enterprise, THAI Airways faced significant legal barriers in accessing that formal protection. By selling the stake and ridding the airline of majority state-owned status, THAI Airways is able to better access the protections and provisions of Thai bankruptcy law.
