Thai Finance Ministry to invest further capital in Thai Airways - with strings attached
Thai Finance Minister, Korn Chatikavanij, stated the Finance Ministry is prepared to support Thai Airways’ capital raising plans and invest additional capital in the carrier on three conditions (Reuters/The Nation, 30-Mar-2010). Conditions include cutting costs by 20% in three years, increasing revenue and to do so without the government’s guarantee for aircraft procurement. The carrier plans to sell up to 1 billion new shares to shareholders and the public, in an offer worth up to USD880 million. The Ministry plans to invest the additional capital to maintain its 51% majority stake. Meanwhile, the Ministry also plans to request Cabinet approval for Thai’s plans to acquire 15 new aircraft.
Thai Finance Ministry: “The significant condition is the end to guarantees. In aircraft acquisition contracts, there was an obligation that the Ministry's holding must not go below 51%. I don't know who authorises whom to offer the obligation,” Korn Chatikavanij, Finance Minister. Source: The Nation, 30-Mar-2010.