Thai Airways’ request for debt restructuring as part of bankruptcy proceedings was approved by a bankruptcy court on Monday.
Earlier this year, the national airline was seeking a 58.1 billion baht ($1.81 billion) loan from the government to help it through the coronavirus crisis. Thai officials told the airline to come up with a restructuring plan instead to avoid bankruptcy.
Thailand’s Central Bankruptcy Court approved a seven-member committee to come up with the restructuring plan.
According to Reuters, the airline needs to restructure 245 billion baht ($7.83 billion) worth of debt.
The airline says it will prepare a business reorganisation plan “as soon as possible” and propose the plan to the local court within the fourth quarter of this year.
“Subsequently, the official receiver will call a creditors’ meeting to consider Thai’s business reorganisation plan around early 2021 and the Court will issue an order approving the plan and appoint the plan administrator within the 1st quarter of 2021. Then, Thai will proceed to implement the business reorganisation plan,” reads a statement from the airline.
The airline continues to remain grounded. Thailand was expected to open its borders to foreign visitors from September 1 but that date has been shelved.
Last month, deputy transport minister Thaworn Senneam blamed the downfall of Thai Airways on mismanagement and corruption.