Thai Air seeks new loans to fund operations after court approval

Thai Airways International Pcl is seeking new loans to help fund operations after the court approved its plan to restructure at least 170 billion baht ($5.5 billion) of debt.

The carrier has been in talks with some banks for loans of as much as 25 billion baht as part of the debt-rehabilitation program, Chief Financial Officer Chai Eamsiri told a video conference with reporters on Wednesday. The Central Bankruptcy Court today endorsed the proposal, which is backed by most creditors, the airline said.

“We would like to secure new loans as soon as possible because our operating revenue can’t cover the operating costs,” said Chai. “Our existing cash and revenue now can cover operations only through the end of this year.”

The airline, whose biggest shareholder is the Finance Ministry, in March proposed a three-year freeze on loan payments and a deferment of bond repayments for six years. To help it return to profitability— it posted a record loss of 141 billion baht last year—the carrier also plans to cut its workforce by half, sell property and seek 50 billion baht in new capital.

“All related parties should go ahead and help Thai Air succeed in its rehabilitation plan,” Prime Minister Prayuth Chan-Ocha told a news conference after a weekly Cabinet meeting Tuesday.

The approved debt plan includes some $7.4 billion in claims from dozens of aircraft lessors and engine-service providers. Bangkok-based Thai Air challenged that in March, saying it isn’t liable for because those claims involve future expenses and were incurred after the airline received bankruptcy protection.

Thai Air has confidence in its ability to be profitable again once the coronavirus pandemic passes, Chief Executive Officer Chansin Treenuchagron told a press conference. Thailand is one of the top travel destinations in the world and the carrier will be able to capitalize on this popularity, he said.