Bangkok’s Central Bankruptcy Court has denied a bid by the Thai Ministry of Finance for two additional administrators needed for the Thai Airways’ rehabilitation phase. The court said the current three administrators were already doing a good job.
The Court deemed that adding two extra people would be more costly than beneficial. The current administrators had managed to rehabilitate without incurring any debts, whereas the addition of two more people would cost 10 million Thai baht (237,000 GBP) annually. The court rejected the bid, despite a majority in favour of the extra administrators.
Previous Backlash
Previously, existing administrators at Thai Airways International proposed to add two government officials to the administration panel.
These officials were Pholjak Nimwattana, Deputy Director of the Ministry of Finance’s State Enterprise Policy Commission Office, and Panya Chuphanich, Director of the Ministry of Transport’s Office of Transport and Traffic Policy and Planning.
However, the proposal faced backlash from the Thai Airways labour union and creditors. A vote held for the matter was delayed until 29th November 2024. The union was concerned that adding extra administrators would lead to increased government involvement and political interference.
Suspicion surrounded the push for extra administrators, requested by the Ministry of Finance, Thai Airways’ top shareholder. Despite this, he cited the need for expertise and government support regarding rehabilitation.
The Thai Cabinet approved the proposed rehabilitation plan after the airline built up 245 billion baht (5.8 billion GBP). The Central Bankruptcy Court then gave the green light following Covid-19.
Future of Thai Airways
The court ruled against adding two administrators to the rehabilitation process. This led to some protest by minority shareholders.
Despite that, the court passed the decision to reduce the par value of shares, eliminating accumulated losses and catalysing debt payments.
Chai Eamsiri, CEO of Thai Airways, said:
“The airline remained on track to exit the business rehabilitation process in the first half of this year and relist on the Bangkok Stock Exchange shortly afterwards.”
Do you think Thai Airways are due for a financial comeback? Let us know in the comments!
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