The long-awaited partial privatisation of Thai Airways International finally looks set to proceed in 1998, spurred by a major Government financial shake-up and the urgent need to raise new capital for the debt-ridden carrier's planned fleet renewal.
Thai invited a pre-selected group of finance brokers to a company briefing on 22 December, following an ultimatum from the country's transport and communications minster to complete the share sale by June. It had hoped to complete the process by the end of 1997, but this could slip into 1998.
Revised planning now calls for the airline to issue 100 million new shares and sell between 150 and 235 million existing shares. Thai hopes to raise $300 million from the sale, which will reduce the Government's holding from 93% to around 73% depending on the final number of shares sold.
Previous plans for partial privatisation of the national carrier have failed to materialise as the result of feuding between the transport and finance ministries, but have now taken renewed importance in the wake of Thailand's severe economic problems and recent international financial bail-out. "The Govern- ment is finally swallowing a dose of economic realism," observes a regional financial analyst.
Thai's end-of-year results suffered an 18% slump in net earnings to 2.76 billion baht ($59 million), which the airline attributed to large foreign-exchange losses. It faces a net debt of around 82 billion baht and is trying to raise financing for 17 new aircraft due for delivery by the end of fiscal year 1998.
Source: Flight International
