Today is D-Day for Thai Airways, with 13,000 creditors voting on whether or not to accept the struggling airline’s rehabilitation plan. According to a Bangkok Post report, a source at the airline has warned that should creditors reject the plan, the carrier will be declared bankrupt and they would only receive 12.9% of what they’re owed.
In the event of a bankruptcy declaration, the airline’s assets will be appraised to decide how much of its debts can be repaid. The estimate of 12.9% is based on the value of assets currently held by the carrier.
The Bangkok Post reports that the rehabilitation plan which was submitted in March covers debts of around 410 billion baht. It’s understood major shareholders own around 180 billion baht of that debt between them. Should the rehab plan be accepted today, it’s likely Thai Airways will be given a certain timeframe in which to turn itself around.
The plan calls for the repayment period of debts arising from unsecured bonds worth 70 billion baht to be extended to 10 years, with a debt moratorium in the early stages of repayment. The airline is also introducing tough cost-cutting measures, including job reductions via early retirement for thousands of its 20,000 workers.
It’s understood the plan does not call for the Ministry of Finance to provide a loan but says anyone can obtain the loan and the ministry can help with cash injection negotiations. The State Enterprise Policy Office has already stated that the government will not re-capitalise the airline.
