Malaysia and Thailand support restructuring of national companies | New
In recent days, entities affiliated with the governments of Malaysia and Thailand have affirmed their support for their respective national companies, both undergoing court-led restructuring.
Khazanah Nasional, the sole shareholder of Malaysia Airlines Group (MAG), Malaysia’s sovereign wealth fund, said in a March 4 statement announcing its financial results for 2020 that it “continues to provide full support and close cooperation in global efforts to ensure the sustainability of the national carrier after the disaster “. pandemic”.
On February 22, a UK court approved a plan of arrangement between MAG’s leasing entity, MAB Leasing, and the majority of MAG’s lessors. The program was supported unanimously after a last donor, which previously had difficulty obtaining approval from its own financiers, consented to the program.
The approval followed months of what MAG described as “intense” negotiations.
Malaysia Airlines declined to comment on March 5, but told Cirium it would share more information on the restructuring and its plans “soon.”
Cirium has contacted Khazanah for comment.
In neighboring Thailand, Thai Airways International submitted its rehabilitation plan on March 2, and the managing director of the State Enterprise Policy Office, Pantip Sripimol, said the key elements are “quite acceptable,” according to a Bloomberg report from 3 March.
Sripimol, whose office reports to the country’s finance ministry, added that the finance ministry would study restructuring proposals in detail before deciding on its vote. The Ministry of Finance owns 47.9% of the capital of Thai Airways, according to the Thailand Stock Exchange.
Cirium has contacted the State Enterprise Policy Office for comment.
Thai’s creditors will have to vote on the rehabilitation plan at a meeting to be called on May 12 and / or May 19. This plan was written by seven rehabilitation planners – six people as well as EY’s corporate advisory services.
Thai confirmed to Cirium on March 3 that he plans to raise 50 billion Bt ($ 1.65 billion) over the next two years and that he plans to deploy a fleet of 86 aircraft in 2025, comprising only five types of planes. The finance ministry will support this fundraising plan, Sripimol said, according to the Bloomberg report.
Such support from government entities has not always been evident in the midst of the Covid-19 crisis.
In October, Khazanah said that if creditors could not agree to a restructuring plan, the fund could end funding for Malaysia Airlines and redirect it to Firefly, a subsidiary of Malaysia Airlines. At that time, many lessors opposed the restructuring of Malaysia Airlines, citing in particular a restriction mechanism that could have effectively forced them to consent to the restructuring.
In the first months of the Covid-19 pandemic, Thai Airways applied for a Bt 58.1 billion bridging loan guaranteed by the Ministry of Finance.
While the loan was approved on April 29 by a committee chaired by Prime Minister Prayuth Chan-ocha and was due to be submitted to the Thai cabinet for approval, the loan was eventually replaced by a business rehabilitation process after the government shut down. asked Thai to come up with a way to restructure its debts, according to Reuters reports of April 30 and May 18.
Thailand’s Central Bankruptcy Court subsequently accepted Thai’s corporate reorganization request on May 27 and approved it in September.
Meanwhile, seven Thai airlines are still seeking soft loans from the Thai government. In September, Chan-ocha received a letter from seven executives of Thai airlines asking him to “consider measures to help the aviation sector in Thailand due to the impact of the Covid-19 epidemic” , and provide Bt 24 billion in low-interest loans to local authorities. carriers.
Thai AirAsia is among the seven, and its chief executive Santisuk Klongchaiya warned this week that Thailand’s reputation as a regional aviation hub could be jeopardized if the government could not speed up the country’s reopening to tourism.
“After dealing with the pandemic for a year, the key factors that can strengthen Thai tourism are reopening borders and financial aid such as soft loans to help airlines maintain operations and save jobs.” Klongchaiya said in a report released on March 5 in Bangkok. .
Cirium has contacted AirAsia for comment.
Updated with comments from Malaysia Airlines