Introduction

Thai Airways International (THAI), once a dominant force in the aviation industry, has embarked on a meticulous rehabilitation journey to restore its financial health and operational efficiency. Central to this endeavor is the strategic allocation of newly issued shares, a move designed to balance stakeholder interests, attract strategic investments, and streamline the company’s capital structure.

Background

Facing financial turbulence exacerbated by global economic challenges and industry-specific downturns, THAI initiated a comprehensive business rehabilitation plan. A pivotal component of this plan is the restructuring of the company’s capital through the issuance and allocation of new shares, aimed at converting debt into equity and attracting fresh capital infusion.

Strategic Allocation of Shares

1. Existing Shareholders:
   • Allocation: 5.04 billion shares
   • Purpose: By offering new shares to existing shareholders, THAI aims to maintain their equity stakes, ensuring their continued support and confidence in the company’s turnaround strategy.
2. Company Employees:
   • Allocation: 59.51 million shares
   • Purpose: Allocating shares to employees serves to boost morale, foster a sense of ownership, and align employee interests with the company’s long-term objectives, thereby enhancing productivity and loyalty.
3. Private Placement:
   • Allocation: 4.71 billion shares at 4.48 baht per share
   • Details:
     • Saha Pathana Inter-Holding (SPI): 22.32 million shares
     • Vichai Kulsomphob (SPI CEO): 250,000 shares
   • Purpose: Engaging strategic investors like SPI through private placement not only brings in necessary capital but also establishes partnerships that can provide operational synergies and market advantages.

Retention and Reduction of Shares

• Unallocated Shares: THAI has retained 5.37 billion shares to facilitate future debt-to-equity conversions and other strategic initiatives, providing flexibility in financial planning and execution.
• Capital Reduction: In line with Clause 5.6.7 of the rehabilitation plan, the company has resolved to decrease its registered capital by eliminating unissued shares, reflecting a commitment to financial discipline and streamlined operations.

Implications for Stakeholders

• Investors: The strategic allocation and pricing of new shares are designed to attract investment while ensuring fair value, potentially leading to stock stabilization and appreciation.
• Employees: Share allocation to employees is likely to enhance engagement and retention, critical factors in the successful implementation of the rehabilitation plan.
• Market Perception: Transparent and strategic financial restructuring can improve market confidence, essential for THAI’s reputation and future business prospects.

Conclusion

Thai Airways International’s methodical approach to share allocation within its rehabilitation plan reflects a deep understanding of corporate finance and stakeholder management. By balancing the interests of existing shareholders, employees, and strategic investors, THAI is laying a robust foundation for its recovery and future growth in the competitive aviation sector.