Thai Airways International Plc has announced plans to issue new shares worth at least 42 billion baht to creditors and investors by December 2024, marking a significant move towards exiting its court-monitored debt restructuring process and resuming trading on the Stock Exchange of Thailand (SET). This decision comes as the national carrier aims to strengthen its financial position following years of operational losses.
In a regulatory filing with the SET and the Securities and Exchange Commission on October 2, 2024, Thai Airways revealed that it will offer approximately 6.81 billion new shares to creditors as part of a debt-to-equity swap. These shares are priced at 2.5452 baht each, bringing the total value of this offering to around 17.3 billion baht. Additionally, the airline plans to allocate 9.82 billion new shares to existing shareholders, employees, and other investors through a private offering. While the exact pricing for this portion has not been disclosed, the airline indicated in a separate statement that the shares will not be priced lower than 2.5452 baht each. Both share sales are anticipated to be finalized by December 31.
The airline has also set aside 14.9 billion new shares specifically for the mandatory debt-to-equity swap with its main creditors, which include the Ministry of Finance. The ministry intends to convert approximately 12.8 billion baht of its debt into new shares, with the remaining amount allocated to other creditors.
Thai Airways is targeting an exit from its court-monitored debt restructuring plan by 2025, five years after filing for bankruptcy protection. The airline has struggled with operational losses annually since 2013, a situation exacerbated by the COVID-19 pandemic, which compelled it to seek protection from the Central Bankruptcy Court.
The airline has recently benefited from a surge in post-pandemic travel, resulting in improved earnings and cash flow since 2023. This recovery has enabled the company to place orders for new Boeing and Airbus aircraft, aiming to expand its service offerings. Chief Executive Officer Chai Eamsiri indicated that the airline plans to grow its fleet to 116 aircraft by 2027, surpassing its pre-pandemic size of 103. The company expects to operate 79 jets by the end of 2024.
Piyasvasti Amranand, chairman of the court-appointed committee overseeing the airline’s rehabilitation, stated that the debt-to-equity swap and new share offering will facilitate the debt restructuring process by converting shareholders’ capital into a surplus. He noted that shareholders’ equity was in deficit by approximately 40 billion baht as of June 30, 2024.
With its improving financial status and capital-raising strategy, Thai Airways anticipates resuming trading of its shares on the SET in 2025, a process that has been on hold since May 2021. According to Mr. Piyasvasti, the airline is expected to file a request to exit the rehabilitation plan with the Central Bankruptcy Court after February 2025, with shares likely to resume trading in the second quarter of next year.
Under the terms of its rehabilitation plan, Thai Airways has reduced its workforce by half, bringing employee numbers down to approximately 10,000. The airline has also streamlined operations by cutting unprofitable routes and reducing its fleet from around 100 aircraft to 64 by the end of 2022. It has generated additional revenue through the sale of aircraft and assets, including its THAI Catering division.
In the first half of 2024, Thai Airways reported a net profit of 2.7 billion baht on revenues totaling 89.9 billion baht, reflecting a 14% increase compared to the same period the previous year.
