Thai Airways facing serious liquidity problem

Thai Airways has been told that it needs to come up with a convincing plan for its long-term rehabilitation before the government will help it financially, said Thailand’s Finance Minister Korn Chatikavanij on Thursday.

The government’s tough stance regarding financial assistance for the national carrier comes at a time that the airline is attempting to deal with difficult financial problems and is need of a cash injection to improve its liquidity.

Poor financial performance at the airline recently has been blamed on fuel hedging commitments and the closing of Bangkok’s two major airports late last year.

Officials at Thai Airways say that the carrier badly needs the government’s financial support. The government owns 51 per cent of the shares in the national airline.

The Finance Ministry is making preparations to lend as much as 200 billion baht to state enterprises that need assistance to maintain their liquidity. The ministry’s plan is expecting cabinet approval on 3 February.

The airline said in a statement released on Thursday that it needs 19 billion baht in order to resolve it liquidity problems.

“THAI also plans to raise 15 billion baht to replace its existing short-term borrowings,” the airline statement added.

The finance minister commented: “The Finance Ministry, as the major shareholder, wants to see a plan that will lead to the financial sustainability of the company and have long-term effects.”

Thanks to www.bangkokpost.com for the above quotes, for more information on this article please visit their website.

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