Thai Air plans US$1.3 billion share sale to complete debt revamp

Thai Airways International plans to issue new shares worth at least US$1.3 billion to creditors and other investors by December, a major step toward exiting a court-monitored debt restructuring and resumption of trading in its shares.

The carrier will offer about 6.81 billion new shares to creditors under a debt-to-equity swap, according to its regulatory filing on Monday (Sep 30). These stocks are priced at 2.5452 baht each, valuing the offering at 17.3 billion baht (S$686.8 million), it said.

Another 9.82 billion new shares will be for existing shareholders, employees and other investors in a private offering. While the company didn’t specify the share price for this offering in the regulator filing, it said in a separate statement that the stocks will not be priced lower than 2.5452 baht each. The company expects to complete both the share sales by Dec 31.

The Thai flag carrier aims to emerge from its court-monitored debt-restructuring plan in 2025, five years after it filed for bankruptcy protection. The state-controlled airline had posted losses from operations every year from 2013, which were worsened by the Covid pandemic that forced it to seek bankruptcy protection.

The airline has benefited from a post-pandemic travel boom, helping boost its earnings and cash flows since 2023. The turnaround has prompted Thai Airways to order a new fleet of Boeing and Airbus jets to expand its services to newer routes and locally.

Thai Airways aims to expand its fleet to 116 aircraft by 2027, bigger than its pre-Covid size of 103, chief executive officer Chai Eamsiri has said. It expects to operate 79 jets by the end of 2024.

“The debt-to-equity swap and new share offering will help Thai Air achieve its debt restructuring process by turning shareholders’ capital into a surplus,” Piyasvasti Amranand, a court-appointed debt administrator, said in the statement. The shareholders equity had a deficit of about 40 billion baht as of June 30, he said.

The improving finances and capital-raising plan will accelerate the resumption of trading in the airline’s shares in 2025, which have been suspended since May 2021, according to Piyasvasti. BLOOMBERG