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Finance Ministry 'to sell 3 per cent of THAI stake to Vayupak Fund 1'

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Unbelievable and what a bunch of sorry hogwash fatheads these people are. If they try to declare bankruptcy in the USA courts they will be denied. On the other point my daughter got her official notice of you are fired. My guess is they are keeping everyone who is attached to someone for how they got the job. Nothing changes.

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The " smoke and mirrors"  is in the way the story has been spun. 

 Also in the device of using  what is effectively  a Government controlled fund, to reduce the Thai Govt shareholding to under the 50% threshold, and so passing on (knowingly)  to that fund's holders a piece of a (likely) worthless asset. 

In doing this they have neatly hung the Thai Airways bond holders out to dry. These include many Thai employment provident funds and co-ops who bought the bonds on the assumption that Thai Air was subject to a state guarantee, and so backed by the full faith and credit of the Thai Govt. The Rating Agency also assumed this  which is why, prior to this week, these bonds had high Investment grade ratings, there was a presumption of Thai Government backing.

In the past both Thai Air and the Thai Govt were able to make use of this presumption of state backing to fund the airline at a significantly lower cost than would have otherwise been available to it.

The shares are likely to be suspended at some point and they are (i guess)  of zero value and the bond holders will likely have their coupons suspended and be subject to capital loss. 

The International creditors will recruit armies of lawyers. The behavior of the Thai Government will be the subject of some future scrutiny, i would think.

 

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5 hours ago, Misterwhisper said:

I am also a little suspicious about the other major shareholders. "Government Savings Bank" with 2.13%? Isn't that a state-controlled financial institution? And what about that dodgy sounding "Vayupak Fund 1" that soon will hold a not so shabby 15.12%? Who are the controlling shareholders there?

"Government Savings Bank" is owned by the state, and "Vayupac Fund" is run by "Krungthai Bank" who are - state owned.

 

So when the smoke clears and you look past the mirrors, some 65% of the shares in Thai will still be owned by the state, in one form or the other.

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8 minutes ago, holy cow cm said:

If they try to declare bankruptcy in the USA courts they will be denied.

What happens if the US courts deny them bankruptcy; will the rest of the world follow suit? Will that mean that international creditors, of which there are no doubt many, will be able to persue Thai for debts in the US courts, or in those of any other third country in which they have a presence?

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1 hour ago, natway09 said:

What gets me is this that the Gov't should not be making these decisions if Thai has officially declared bankruptcy. They have no right to do so.

The International Receivers & Accountancy firm who will in turn appoint specialists to  assess whats best.

Not a Government who has already shown it has no idea how to run an airline let alone one that is 

perfectly placed in geographic terms to be a great success

I haven't seen any announcement that THAI has actually filed formally for bankruptcy with the court; only that the government intends that to occur. So the State as majority shareholder would still be free to sell any of its shares to whomever it chooses before such filing. It could have made a private sale to a non-government entity such as a privately owned enterprise.

Once filed in court all such stock actions cease and must gain approval of the court under a formal court approved bankruptcy plan.

If all the government has done with the subject 3% is move it to state controlled entity before formal bankruptcy filing, it is frozen there after the filing and becomes part of any court bankruptcy plan.

In short the sale/transfer doesn't appear to have any relevance other than what some OP's point to 'smoke & mirrors.' Maybe buys time to delay filing bankruptcy to show the government is taking a lead in the airline problem?

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5 minutes ago, herfiehandbag said:

What happens if the US courts deny them bankruptcy; will the rest of the world follow suit? Will that mean that international creditors, of which there are no doubt many, will be able to persue Thai for debts in the US courts, or in those of any other third country in which they have a presence?

Wait and see. But why should the US courts release them from a debt burden when they are obviously still state owned. They need to get 100% out from Thai Airways and stop trying to pretend to the world that it is bonafide restructuring. The world does not owe them their airlines. If they feel that way then go get their planes from China or Russia. 

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almost bankrupt but still able to sell shares for something to be worthless

 

or never made any profit in all those years...

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smoke and mirrors, they are paying for influence not a stake in a failed airline. Look upon it as marketing, or a lost leader. 

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Posted (edited)

This issue could become even more toxic for the Thai Government if there is any suggestion or suspicion that there has been any difference in the treatment of Thai entity creditors vs the international creditors. Or, if the principals of creditor hierarchy are not strictly applied eg if  lower ranking (eg Thai) creditors take any kind  precedence (or get any kind of  special treatment or favor) over other ( lets say international) creditors.

This will all have to be conducted under the glare of international scrutiny. And the legal process will not be fully under Thai Govt control.

Not something this Government will be particularly comfortable with, I suspect.

Edited by wordchild
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Maybe 3 percent keeps someone off the hook...

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They may be able to get a debt reduction on outstanding debt although I am not sure of that.  BUT the problems are going to show up when they want to land at foreign airports, use foreign facilities, get repairs to aircraft while on the ground, buy anything.  Let's face it if their credit is not good and the same people are running the company and holding the stocks no one is gong to want to do business with them based on credit.

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The pigs squeal when the trap  panel  slams shut.  The business world will see Thailand government for what it is

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On 5/23/2020 at 12:00 PM, Misterwhisper said:

As long as the Thai state is still hanging on to almost 50% of ownership, there can be no rehabilitation. Even with "only" 48%, the Finance Ministry - and by extension meddling officials and politicians - will still have way too much sway and clout over the airline. Thai Airways (if not scrapped for good) should be fully privatized.

 

I am also a little suspicious about the other major shareholders. "Government Savings Bank" with 2.13%? Isn't that a state-controlled financial institution? And what about that dodgy sounding "Vayupak Fund 1" that soon will hold a not so shabby 15.12%? Who are the controlling shareholders there?

 

Somehow I have the impression that nothing will change as per Thai Airways ownership as shares are simply shifted around among the very same entities that ALREADY are the main shareholders anyway. 

The VA gives it away doesn't it haha

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