Thai Air May Issue New Shares For Restructuring
National carrier Thai Airways said Friday it was considering issuing new shares to raise capital for its longterm restructuring plans.
Thai Airways Chairman Ampon Kittiampon told reporters the share issue was among several longterm options being considered by the cash-strapped airline, but he gave no details.
Earlier, the Thai Airways board approved plans to seek up to THB35 billion baht (USD$1.02 billion) of loans in short-to-medium term funding to finance its restructuring.
"We have about four to five financial institutions to help help arrange the money to boost the company's liquidity," Ampon said adding the airline would set up a working committee to negotiate with the banks.
The airline is in the process of rehabilitating its operations after it reported a record net loss for the fourth quarter of 2008. Passenger numbers dropped due to domestic political instability, the global crisis and surging fuel costs.
It reported a net profit of THB7.87 billion in the first quarter, boosted by a foreign exchange gain and falling costs.
Narongsak Sangapong, the airline's acting president, said the second quarter was affected by lower tourist arrivals due to the global impact of the swine flu virus, and fallout from political violence in Thailand in April.
Second-quarter cabin factor was 64-65 percent, down from more than 80 percent in the first quarter, he said.
"I am not sure we will make a profit in the second quarter," Narongsak told reporters.
However, he still expected Thai Airways to report a profit for 2009, in line with analyst forecasts, on expectations that travel will rebound in the second half of the year.
"Tourists should come back during the peak season in the third and fourth quarters. We think the flu outbreak should be under control by then," Narongsak said.
Thai Airways, which posted a huge net loss last year, is among several Asian airlines struggling to cope with reduced travel because of the global economic crisis and a surge in fuel costs last year.
