EXCLUSIVE – Thai Airways to seek $ 1.8 billion emergency loan to deal with virus impact – document

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By Chayut Setboonsarng and Panu Wongcha-um

BANGKOK, April 30 (Reuters)Thai Airways International PCL THAI.BK aims to apply for an emergency loan of 58.1 billion baht ($ 1.80 billion) to maintain liquidity and help them cope with a coronavirus-induced drop in demand, a document from the airline detailing its plan.

The proposed bridging loan, guaranteed by the finance ministry, was approved on Wednesday by a committee chaired by Prime Minister Prayuth Chan-ocha and will be submitted to Cabinet for final approval as early as next week, a person involved in the decision to solicit the loan told Reuters.

Thai media reported that the airline was seeking a multibillion baht loan. The document seen by Reuters reveals for the first time the detailed plan of the carrier.

After the loan, the money-losing national carrier will raise 77.04 billion baht in capital by issuing new shares around November, and use the proceeds to pay off the loan plus interest and maintain liquidity, according to the document.

Thai Airways made no immediate comment when contacted by Reuters. The authenticity of the document was confirmed by two people involved in the decision to apply for the loan, who declined to be identified as they were not authorized to speak with the media.

Thai Airways was already facing financial problems before the coronavirus outbreak, having reported losses since 2017.

The national carrier suspended flights in March as travel demand plummeted, with governments around the world imposing movement restrictions to slow the spread of the novel coronavirus. Its president then resigned after less than two years in office.

Thai Airways, which is celebrating its 60th anniversary this year, will receive the emergency funds gradually based on operational plans, one of the people said.

The plan also calls for reducing the number of aircraft to 84 from 103 by 2024 and aircraft types to six from seven.

Southeast Asia’s second-largest economy is at risk of losing 1.3 trillion baht, mostly in the tourism sector, due to the virus that has infected more than 3.13 million people worldwide.

($ 1 = 32,3300 baht)

Thai Airways chairman resigns as travel fades

Thai Airways cancels almost all international flights

Thailand’s economy could lose more than $ 40 billion if viral crisis continues beyond second quarter

FACTBOX – More than 3.13 million cases of coronavirus worldwide, death toll exceeds 218,100

(Reporting by Chayut Setboonsarng and Panu Wongcha-um; Editing by Christopher Cushing)

(([email protected], Twitter: @ChayutSet; +66854849033;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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