Thai Airways International, Thailand’s largest airline, plans to issue shares next year to raise funds for repaying short-term debt, its newly appointed president said on Monday.
Piyasvasti Amranand did not say how much money the flag carrier will raise. But 29 billion baht ($869 million) of debt matures next year, he added.
Kosin Sripaiboon, a senior analyst with UOB Kay Hian Securities, said he expected Thai Airways to raise almost 20 billion baht ($600 million), or issue 800 million new shares, half of its current registered capital of 1.7 billion shares.
The carrier has a total debt of 160 billion baht [4,8 billions USD]
“We need to raise capital because we have a lot of short-term debt to be repaid,” Piyasvasti said.
“We are also trying to convert our short-term debt to longer maturities. As the long-term debt has a maturity of six years, that doesn’t match our funding for plane procurements,” he told reporters on the first day of his top job. (Reuters)
Let me translate what the new president seems to have discovered on his first day on the job : Thai Airways is broke. Speak about a discovery !
Let’s review the titles of some of my articles about the national carrier.
–Thai Airways : “The situation has deteriorated from bad to worse “...
–Thai Airways : is there any captain on (the) board ?
–If… if… if and if… Thai Airways will return to profits
–No cash to pay new airplanes, airports closure, economic downturn… Thai Airways is crashing
–Peter Principle : desperate Thai Airways relies on… government officials to fill its aircrafts and seeks 1 billion USD
–Thai Airways : tales of the daily corruption
You have an image coming to your mind ? Yes, you’re right : a crashing airplane.
Sure… we could blame the high oil prices in 2008… the political crisis… the flu… then the recession… then the extraterrestrials, etc. This is exactly what the new president is doing.
Long gone are the days when Thai Airways was so terribly exotic… when tourism increased every year… when the reputation of the airline was a rising star…
Those externals factors had a cruel effect : they expose the company, naked, in front of the whole world. It’s impossible to lie anymore, to hide behind a reputation and a never ending tourism growth. The party is over. Now it’s time to pay, and the smart money is unlikely to answer the call.
Thai Airways is a public company (the thai government is the first shareholder), baddly managed, indebted, overstaffed, with an old fleet, acting like a reservoir of privileges for many lunatics in unform (the cousin, the maid, the mia noi of General X, colonel Y etc.), frozen in time, rapped and abused over and over by politicians, and unions too.
A perfect cas d’ecole. A negative show case.
So who is going to buy this generous offer ? Shares from Thai Airways ? To invest now in an airline, and in Thai Airways, would be just suicidal.
The thai government ? Broke too.
And what about dilution ?
But eventually, of course, someone will pay : the thai people.