Thai Air Gets Court’s Approval for Debt Restructuring Plan

(Bloomberg) -- Thai Airways International Pcl received court approval for its debt restructuring plan, enabling the carrier to extend payment and waive unpaid interest on at least 170 billion baht ($5.5 billion) of its debt.

The Central Bankruptcy Court endorsed the debt plan, which is backed by most creditors, Kitipong Urapeepatanapong, chairman of Baker & McKenzie in Bangkok, the airline’s legal adviser, said by phone on Tuesday. About 91% of creditors approved the rehabilitation proposal at a meeting last month.

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

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 after posting a record loss of 141 billion baht last year, the carrier also plans to cut its workforce by half, sell property and is seeking to raise 50 billion baht in new capital.

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 the monies because they concern future expenses and were incurred after the airline received bankruptcy protection.

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