Deadline submits Thai Airways rehabilitation plan 2 March this time, the plan makers are busy Most sound creditors “Disagree”, “Bank-Cooperative Debenture Payable”, hit a 70% haircut plan. Bank accepts no more than 50% debt reduction with debt conversion formula and “Treasury” conditions. The business model is not clear. The plan maker refused to retreat, not the cooperative debt haircut Treasury calls to bank creditors urgently discuss, suggesting has 60 days to dismantle plans before creditors meeting
Sources from Thai Airways International Public Company Limited reveal “Prachachat Business” That the Thai Airways rehabilitation plan is still turbulent last minute Before concluding, filed with the Central Bankruptcy Court Which is scheduled for the last day on March 2, after the planner has filed with the court to postpone the submission of rehabilitation plans 2 times (since 2 January 2021) for reasons that there are many creditors. And involves many sectors Therefore it takes a long time to discuss So that the rehabilitation plan is acceptable to all parties
However, from the bankruptcy court issued an order for business rehabilitation Thai Airways International Public Company Limited on 14 September 2020 and has opened for creditors to apply for debt repayment totaling approximately 1.8 hundred billion baht.
In which after the negotiating plans with the major creditors Both in respect of creditors of financial institutions Creditors of cooperatives (loan) including the Ministry of Finance as the major shareholder. There are still many issues that cannot be concluded.
“The rehabilitation plan that the mapping team has negotiated with the major creditors outside the round. With the main content is Request to reduce the value of outstanding debt (her cut) by 70%, which the majority of creditors do not agree and can not accept. Recently, there was a creditors bank making a proposed plan for the planner to consider. “
Bank creditors shake the plan
The source said For creditors of financial institutions such as Bangkok Bank And Krung Thai Bank Has offered a haircut not more than 50% of the debt, the rest is to convert debt to equity. While the new credit line to enhance liquidity for Thai Airways to rehabilitate that business Still under negotiation
While the Ministry of Finance has to reinsert the capital increase In order to build confidence among creditors Which in this section there is no clear conclusion that How much money will the Ministry of Finance put in the capital increase? It depends on the proportion of the creditors as well. However, if the treasury adds more than 51% capital, the company will return to the status of state-owned enterprises again. Had to find a way for anyone to become a shareholder instead “In this case, the Ministry of Finance And creditors have to put money into both the capital increase and the loan increase. Because not so Thai Airways cannot go on. At this time, the Kiatnakin Phatra Financial Group Who became a financial advisor Under negotiation with creditors, if using 50% debt haircut plan, it is expected that there will be money coming in the capital increase. Debt to equity conversion Including from new loans totaling about 50 billion baht “
Extend the rehabilitation plan to 10 years.
The source said According to the original rehabilitation plan that the planners needed a 70% debt haircut, it was expected to leave the rehabilitation plan within 5 years. It is expected that the possibility of exiting the rehabilitation plan will take longer to 10 years because in addition to the debt restructuring plan, business restructuring will be required. As for the impact of the tourism sector, travel from the epidemic of COVID-19 Still have continued And it is not clear how the world travel situation will change after this.
For the creditors of the savings cooperative who are the major buyers of debentures worth approximately 70 billion baht. Considered a major creditor Recently, the plan has been adjusted to not be a haircut. However, all repayments will be made within 15 years, in respect of the foreign creditors who are the aircraft lease, have been negotiated. Most of which accept proposals to reduce airfare. Some who do not agree will return the charter plane early.
Treasury calls to bank creditors discuss
A source of the Ministry of Finance said. Thai Airways restoration plan is not yet a definite conclusion, as of 25 February the past. Thai Airways had a meeting with creditors, and in the evening Mr. Arkom Termpittayapaisit, Minister of Finance, called for creditors such as Government Savings Bank, Krung Thai Bank. Export-Import Bank of Thailand (Exim Bank), Bangkok Bank, etc. to discuss the rehabilitation plan of Thai Airways. That the plan preparer will file with the bankruptcy court by 2 March
In the past, the planner offered 70% of the debt harrcut to financial institution creditors, while about 40% of cooperative bond creditors were the key creditors. Because the cooperatives vote on any party That side will win And the cooperative insists on the haircut While privately owned bank creditors offer a way for haircuts to no more than 50%, including the Ministry of Finance to raise capital. At a level that may cause Thai Airways to return as a state enterprise again Or giving the public sector more than 50% stake, which will lead to determining whether The first amount to come in to raise capital And how much will it be used as working capital? “
Waiting for the treasury, knocking the capital increase number
“Creditors’ bankers viewed each other that If the state is a pilot Or other creditors to put money, but if the state does not put money, various creditors do not know how to put money Because today, if there is no cabinet resolution (cabinet) supported, this company must be considered bankrupt. Putting money into it carries a high risk. Which must be considered as necessary Because if you enter up to 50 billion baht as it is mentioned Thai Airways would not have to struggle to improve. Or what performance enhancement Because there are some creditors banks that estimate that just over 30 billion baht is enough “ The source said.
Blurry business model
In addition, there is also an issue of uneven business model. Because there are still ideas that still want to revive the original Thai Airways And giving away business Or even have a proposal to form a new company Is a national aviation company Which may cost less money
The source said In the past, the rehabilitation plan has not yet been able to build creditors’ confidence. Because Thai Airways still has no clear answer that Businesses that will generate income in the future will come from the country. Or abroad Which if said that Thai Airways will fly internationally as the main one Still, no one has clarified how much international travel will be able to recover.
“Today, Thai Airways does not fly domestically. All income has gone to Thai Smile. While today Thai Smile can take the plane to get the loan and then lose the debt, it cannot be paid. Asked if Thai Smile had to be restored as well, or would it be shut down, there were more than 10 planes that belong to Thai Airways. But the income is from Thai Smile Like this, creditors will agree or Because Thai Airways refuses to change its business model to be in line with the situation “ The source said.
The big creditors still disagree.
The source said In accordance with the procedure after the planner submits the business rehabilitation plan to the bankruptcy court by March 2, the court will determine the date of the creditors meeting. To vote for the plan within 60 days, in the period before the meeting of creditors 3 days, plan makers and creditors can negotiate and change the rehabilitation plan.
“however Speaking with the major creditors, it is likely that more than 50% of the creditors will likely not accept the proposed plan. The creditors may negotiate to propose amendments to the rehabilitation plan to come in March before the meeting of creditors to vote. “
In addition, creditors are of the opinion that Thai Airways Company should restructure And clearly separated into business units such as aviation kitchen, mechanic department, cargo, etc. so that each company has lower capital Easy to find partners and raise funds Making it clear to the partners that What business did he invest in? Not investing in Thai Airways companies anymore Because if using traditional management methods, it will be difficult to raise funds. And have to top up a lot of money
“The main issues that most creditors want to see in the plan are three big things: 1. Cut THAI Smile from the structure of Thai Airways Company. 2. The plan administrator must not be a group of plan makers and 3. Debt restructuring must not affect the creditor too much. Not using a 70% debt haircut system, however, in this section, the bank and the government will conclude. It is expected that the plan administrators will have a list of 3-4 people from the original planner and the rest will be attracted by other professionals. “ The source said.
The depot has 60 days to dismantle the plan.
Mr. Krisada Chinavichana The Permanent Secretary of the Ministry of Finance said that at this time, Thai Airways did not see any rehabilitation plan. Understand that Thai Airways is now working with creditors and will submit a plan next week. Then there is a 60 day legal time frame that can still consider modifications to the plan.
“In the past, Thai Airways has always had discussions with the Public Debt Management Office (PDR), Sor Kor Sor and creditors all along. While the finance ministry’s debt is small, it actually has to talk to a larger financial institution. And in the end it must come out as an acceptable plan “ Mr. Krisada said.
Mr. Krisada said Understand that the consultant and the planner must have considered each other well The planters of the government have established knowledge, abilities and, as is known, the assumptions are similar. Both about financial statements Acceptable cash flows That shouldn’t be a problem. But the issue is In order to continue to manage in any form and how, which is unlikely to be a state-owned enterprise? Because the treasury has reduced its shareholding that is not a state enterprise before entering the rehabilitation plan
The rehabilitation plan costs 50 billion.
“A map has been created. As you know, all the assumptions are all right, you still have to consider that Who will come and help me? Understand that financial institutions have to join together to help There are various ways to put money such as debt to equity conversion. “
Mr. Krisada said Understand that Thai Airways needs funds to continue to operate Initially expected to be around 30,000-50,000 million baht is money in the first phase of rehabilitation plan implementation. To be able to carry out the plan The part will come in any form, still not sure.
“You have to look at what you have to put in more, such as capital or debt. Which will be in the rehabilitation plan But may not be fixed Because it is written about how much new sources of money will be in Had to find a new source of money Depending on the plan maker “
When asked how would you like to see Thai Airways Mr. Krisada said Want to see back to normal, good profit as a national airline As for the merger of airlines, children will have or not. They have no opinion Must see the plan’s proposal
Year ’63 loss of 1.41 billion
News reports from Thai Burning Public Company Limited revealed that In 2020, the Company and its subsidiaries had total revenues of 48,311 million baht, total expenses of 96,430 million baht, resulting in an operating loss of 48,119 million baht and a net loss of 141,180 million baht.
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