On July 1, 2022, the plan administrator of Thai Airways International Public Company Limited submitted the Business Reorganization Plan Amendment Application (the “Plan”) to the Official Receiver. On July 1, 2022, the Official Receiver convened the meeting of creditors electronically (e-Meeting). The creditors, with the sum total of their debt amount equal to 78.59% of the debt amount of all creditors who attended the meeting of creditors and cast their vote, accepted the proposed amendment to the Plan . Later, during the hearing before the Central Bankruptcy Court, some creditors filed an objection with the Central Bankruptcy Court. On October 20, 2022, the Central Bankruptcy Court issued an order approving the proposed modification of the Company’s Plan. The summary of the Court’s order is as follows:
(1) The amendment to the Debt Repayment Plan, by conversion of existing debt into a newly issued common stock to the Department of Finance, creditors of financial institutions and creditor of debentures, provides a time limit for the payment of debts to each creditor in the same class in equal shares by December 31, 2024. In addition, the plan administrator must review and determine an appropriate price of the newly issued common stock for existing shareholders, THAI employees and new investors. In addition, this deadline has always been discussed with the creditors’ committee, of which Bangkok Bank, the 4th opponent, is also one of the creditors’ committees. Moreover, under the law, each creditor of the same class must be treated in the same way. The plan administrator also confirmed that the resolution on the conversion of the existing debt of each class and creditors at the same time, so that the repayment made to the same class is also done. The proposed modification of this part therefore contains all the details, the procedure and the condition. No part is considered discriminating. Furthermore, creditors who are affiliated with Bangkok Bank, which is Thailand’s main financial institution, did not object to this amended part. In addition, 78.59% of the creditors who attended the meeting and cast their vote accepted the proposed amendment to the Plan. This shows that the majority of creditors, including creditors who receive debt repayment through debt-to-equity conversion, have accepted and support this amendment. It is believed that such a modification will help the debtor to have better financial statements and that the creditors will receive the repayment of the debt more quickly. The conversion of debt into equity is therefore not contrary to the Bankruptcy Act.
(2) The amendment to the plan consists in part of adding conditions to the repayment of the indebtedness of the creditors of the repayment of the note, i.e. to repay the value of the note which has been registered and the repayment can be made from from the date the court approves the plan amendment and such repayment must be completed no later than March 31, 2024, may result in a difference in repayment amount from the Official Receiver’s final debt repayment order or of the court. The modification of the means of repayment of the debt is not a deduction from the amount of the debt. It is debt repayment based on the actual price of the ticket the debtors receive and the right and obligation of the parties involved in normal business and the ticket agent. In addition, the passenger can receive debt repayment more quickly, without having to wait for the final debt repayment order. Furthermore, no creditor opposed this proposed modification of the Plan.
(3) Amendment of the Plan on the repayment of debt to creditors having a dispute with the Company in the foreign court and it is necessary for the Plan Administrator to negotiate and settle the disputes with such creditor. If the debtor does not repay the debt to these creditors, the debtor’s assets located abroad may be seized, including an aircraft while it is landed. This can be an impediment to business operation which can adversely affect revenue and reputation, including financial position and the ability to repay debt to the creditor in accordance with the Plan. Furthermore, it does not appear that opponents receive any effect from such an amendment. Opponents do not offer any other better alternative or solution that allows the administrator of the plan to operate flights in the country where the disputes arose without any difficulty or obstacle provided that the modification of this part is not carried out. Thus, the modification of the Plan on this part is essential.
(4) Amendment of the Creditor Debt Reimbursement Plan which is very important for the business operation of THAI. The creditor who is the provider of airport services, ground handling services and other services important to the operation of the business, as specified in the list of names together with details of the amount of the outstanding debt, must be considered as very important creditors for the normal functioning of THAI. operation of the company. If the Plan were not modified, the debtor would not be able to continue its normal activities. It is not considered that the creditors who submitted the repayment of the debt are affected. Moreover, such an amendment is intended to generate revenue in order to repay creditors. It is therefore necessary and not considered contrary to the Bankruptcy Act. However, a condition that allows the debtor to propose additional creditors, the outstanding amount and the need to make repayment to the creditors’ committee means that the creditors’ meeting and the court could not examine these details. Therefore, this condition should be removed. However, such withdrawal is not a significant part of the plan. The other parts of the plan are still in effect.
(5) The amendment of the plan on the business transformation plan, the new installation commission and the condition to minimize the risk of creditor who is forced to convert the debt into equity, including the condition of completion of the plan are not the condition provided by law. Removing a new installation committee will shorten the process. From the creditors’ committee that will oversee the plan administrator. Therefore, the modification of the plan is considered legal. With respect to the business transformation plan, the authority of the plan administrator is to manage the debtor’s assets in accordance with the plan, including the business plan. The conditions (i) to minimize the risk of the creditor who is forced to convert the debt into shares and (ii) to have sufficient financial facilities as a condition of completion of the Plan concerned by Bangkok Bank, the 4th Objector would oblige the Plan administrator to seek a high amount of facility in order to repay debt by converting debt to equity and exit from corporate reorganization. However, it is not easy to seek a high amount of relief while the debtor’s business is insolvent. Also, it depends on the terms or negotiation of the organization or financial institution that can provide the financial support, which is an external and uncontrollable factor. Such a condition is therefore a burden on the debtor, i.e. the debtor is obliged to repay a huge debt in the future. The plan only needs to clearly mention the new installation, but it is not necessary to specify as a condition of completion of the plan. The proposed Plan amendment is therefore fully required by law.
The Plan Administrator, officers and each employee are confident that the reorganization of operations under the Court-approved Plan will be smoothly implemented through to completion to the benefit of all creditors. We assure THAI’s creditors, customer and business partner that THAI will resume its business and services as the flag and pride of Thailand and the Thai people, and will generate profits and continue to grow sustainably in a near future.