Thai Airways confident in rehabilitation request as court hearing nears

BANGKOK, July 31 (Reuters) – Thai Airways International Pcl expects the bankruptcy court to allow for a rehabilitation process after a hearing next month on its restructuring proposals, its legal advisor told a shareholders meeting on Friday.

“We have not had any obstacles so far because creditors have been cooperative,” Kitipong Urapeepatanapong said.

The bankruptcy court accepted the airline’s petition for bankruptcy protection in May, giving it an automatic stay on debt repayments and setting Aug. 17 for its first hearing.

Thai Airways would restructure debt worth around 245 billion baht ($7.9 billion).

Kitipong expects the court to accept the airlines’ request and appoint a committee to design the rehabilitation plan.

After the plan is drawn up, it will be submitted to creditors and the court for approval next year, he said.

Rehabilitation administrators can begin restructuring in May or June 2021 in a process that could take up to seven years.

While some countries have not accepted the automatic stay, but airplane lessors have been supportive due to the pandemic, Thai Airways Acting President Chansin Treenuchagron told reporters in a separate briefing.

The collapse of travel demand and the grounding of flights across the globe due to the coronavirus outbreak has tipped several industry players over the edge.

On Thursday, budget carrier Nok Airlines Pcl, of which Thai Airways has a 13% stake, submitted a petition for bankruptcy protection.

Chansin said he was confident he had the support of between 70% and 80% of creditors, with holdouts mostly being individual corporate bonds investors.

Chansin said his focus was on Aug. 17, where the airline would have to justify its need for the rehabilitation and show planners are reliable and had aviation experience.

Asked about the carrier’s liquidity he said it was “manageable.”

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