Thai Airways International Public Files Petition to Change Plan to Build Confidence for Airline Business to Resume, with Exponential Revenue Growth in Highest Liquidity in 24 Months

Thai Airways International Public Company Limited (THAI) said THAI has achieved significant revenue since November 2021 due to the easing of the global COVID-19 situation and international travel measures, the realization of government preventive measures, to the Test and Go travel measures and the full reopening of borders on July 1, 2022 as well as the declining COVID-19 situation around the world which has led various countries to relax and gradually roll back travel control measures since the last quarter of 2021. As a result, THAI is increasing flight frequencies in response to growing travel demand. During the period from June 1 to June 27, 2022, the average number of daily passengers of THAI and THAI Smile increased to 12,568 and 12,257 passengers per day, compared to 269 and 4,929 passengers per day, respectively, compared to those from April to October 2021. While the cabin factor increased to 75% in June 2022, advance booking in the third quarter of 2022 shows continued growth compared to the same period last year. In the first 6 months of 2022, THAI has increased flight frequencies and opened new routes, again to capitalize on opportunities as air travel demand appears to be recovering rapidly. These routes are Delhi, Mumbai, Chennai, Bangalore, Lahore, Karachi, Islamabad, Hanoi, Ho Chi Minh City, Phnom Penh, Melbourne, London, Jakarta, Dhaka, Frankfurt, Taipei, Singapore, Copenhagen, Munich, Zurich, etc. THAI also plans to further increase flight frequencies in the second half of the year to Jakarta, Taipei, Singapore, Copenhagen, Munich, Zurich and Seoul, with flights to Tokyo (Haneda Airport), Brussels and Jeddah will be introduced as new routes. On the freight side, THAI freight revenue in May 2022 was 2,104 million baht, 41% higher than the same period in 2019.

THAI has made progress in reorganizing the business in other parts of the process, including achieving organizational restructuring to be competitive in the aviation industry, improving competitiveness to support growth sustainable, the disposal of assets that are not essential for the business plan (both through sales and rents) which generates cash flow for the company totaling approximately 9 billion baht which has been used for maintaining the operation of the business for the past 2 years without creating burdens for shareholders and creditors, reducing costs in various areas such as the cost of maintenance of aircraft and aircraft engines and the increased efficiency of fuel use in aviation operations. THAI has also made progress in managing people and benefits, managing distribution channels, as well as increasing efficiency and revenue generation opportunities, improving digital transformation and revenue generation. of the aviation business unit. The company has established business cooperation with potential partners to expand distribution channels and developed new products in the market, such as THAI’s (Patongko) fried dough stick, THAI’s “Royal Orchid Dining Experience” restaurant Catering, freight charter flight services, as well as the development of aircraft and aircraft engine maintenance services. As a result, THAI’s cash levels have increased significantly, causing demand for new loans to decline from the original plan.

Therefore, today (July 1, 2022), the Plan Administrator submitted the Plan Amendment Application to the Official Receiver. The main issues of the plan amendment are as follows:

1. THAI can apply for a new term loan of up to 6 years and/or a bond with a term of up to 6 years, i.e. up to 12,500 million baht. In addition, THAI can also seek a revolving facility of up to 12,500 million baht.

2. THAI should increase its registered capital by about 31,500 million shares in order to obtain positive equity for the stability of THAI’s financial situation. Therefore, THAI shares can be traded again on the stock exchange with the following methods.

a. Give a new backer the right to purchase a new share at the same amount as the drawdown amount of the new facility of approximately 12,500 million baht.

b. Reimburse the creditor under the plan with debt-to-equity conversion. The Ministry of Finance, which is the financial creditor and the main shareholder, will be reimbursed by conversion of debt into equity for the entire principal amount. Other financial creditors, including bondholders, will be repaid by conversion of debt into equity for 24.50% of the capital and the remaining capital of 75.50% will be repaid in cash with the same duration as the existing plan. The debt-to-equity conversion causes THAI to increase its equity and reduce plan liabilities by approximately 37,800 million baht.

vs. Award the new shares to the creditor under the plan to exercise their right to convert the new interest into shares at 2.5452 Baht/share. This may cause THAI to reduce debt on new interest, which is suspended, by approximately 4,845 million baht.

D. Allocate and sell the new shares, at such price as the plan administrator deems appropriate and at least 2.5452 baht/share, to the original shareholders according to their proportion. In the event that no one exercises the right or the original shareholder does not exercise the right to purchase the shares in full, the remaining share will be sold to THAI employees and in a private placement. This would raise additional equity for THAI of around 25,000 million baht.

THAI expects to receive the total equity from the debt and equity restructuring under the plan amendment proposal of approximately 80,000 million baht. THAI expects to complete this recapitalization by 2024. If this process can be completed under the plan amendment proposal, THAI’s equity will be positive in 2024 and THAI stock will likely trade again. on the stock market in 2025.

3. THAI revises and adds repayment details to certain categories of creditors to clarify the implementation and improvement of flexibility in the operation of THAI during the ramp-up period without any effect on the right of creditors and the reimbursement under the Plan.

4. THAI revises the details of the success of the plan and the parts that are unnecessary and incompatible with the current situation.

The Plan Administrator is confident that the submission of the Plan Amendment Proposal would enhance the confidence of THAI’s creditors, shareholders, passengers and customers in the reorganization of THAI’s business. This is an important step in laying the foundation for THAI’s growth and profitability in the future in order to maintain THAI as the national carrier, the main airline bringing profits to the country and the main resource to support and promote Thai economic recovery in the coming period.

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