BANGKOK, 21 May 2021: After a week-long delay, Thai Airways
International’s creditors regrouped at a meeting on Wednesday to approve the
airline’s debt restructuring plan following changes to four clauses.

It nudges the painful debt collection process forward for an
army of creditors precisely a year after the airline sought protection from
creditors under a so-called  Chapter 11
provision in Thailand’s bankruptcy law.

The reorganisation under the auspices of the Central
Bankruptcy Court of Thailand and the Bankruptcy Act was announced on 19 May
2020. THAI confirmed it had filed for business reorganisation under the
bankruptcy law and assured customers it would “not go into liquidation or
declare bankruptcy.”

A year later, creditors signed off on the debt restructuring
plan with a favourable vote from 28 of the 36 groups representing the interests
of more than 13,000 creditors. As a result, THAI is in debt to the tune of
THB116 billion to the registered creditors.

A Bangkok Post report Wednesday noted the creditors secured
amendments to conditions outlined in chapters four, 13 and 15 of the debt
restructuring plan.

Chapter 4 of the plan says, according to the Post,
“THAI requires consistent state support and should be allowed to operate
its aviation and related businesses with the same privileges accorded to it
before it ceased being a state-owned enterprise and entered the rehabilitation
process.”

The amendment will cause considerable debate and controversy
as it could leave the door open to government intervention to secure loans, possibly
through state guarantees.

There is considerable opposition to the idea that the
government should bail out the airline and reinstate its privileged state
enterprise status through a capital infusion.

To succeed, critics argue the airline needs private sector
investment and management control, with the government reducing its stake to a
minimum to end political interference and gross mismanagement.

However, the Bangkok Post reported that the rehabilitation
plan calls for the state to help the airline secure THB50 billion in fresh
funding even though the State Enterprise Policy Office reiterated the
government is under no obligation to rescue the airline.