Thai Airways' record $900m loss wipes out shareholder equity

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yong
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Thai Airways' record $900m loss wipes out shareholder equity

Post by yong »

https://asia.nikkei.com/Business/Transp ... 6&si=44594


Thai Airways' record $900m loss wipes out shareholder equity
Troubled flag carrier off to rocky start in rehabilitation under bankruptcy court

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Liabilities at Thai Airways ballooned to 332.1 billion baht as of June, up nearly 37% from the end of 2019. (Photo by Akira Kodaka)
MASAYUKI YUDA, Nikkei staff writerAugust 14, 2020 13:52 JST

BANGKOK -- Thai Airways International has revealed the damage to its financial status inflicted by the coronavirus pandemic, which gave it a final push to give up the idea of self-resuscitation.

The cash-strapped national flag carrier's net loss for the first half of this year was 28 billion baht ($900 million), according to its financial results released on Friday. The loss ballooned 4.4-fold compared to the same period the previous year, marking the largest retreat for the first half of a fiscal year since comparable data became available in 2007.

Its total revenue decreased by 56.9% to 40 billion baht, reflecting the strengthening impact of the coronavirus despite social-distancing measures. In pre-coronavirus times, the first half, especially the first quarter, of each year provided Thai Airways with most of its profit, as Thailand attracts many Chinese tourists during the Lunar New Year.

The results were posted ahead of the first hearing scheduled on Monday with the Bankruptcy Court to discuss the rehabilitation of the troubled carrier. Thai Airways filed corporate reorganization proceedings at the court in May, as COVID-19 travel restrictions eroded its cash management.

The announcement of results on Friday was the first time the financial damage of COVID-19 to the national flag carrier had seen the light of the day. Thai Airways was granted an extension on submitting its March results by the Stock Exchange of Thailand until Friday. The March results were posted along with the June results.


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It recorded a net loss of 5.3 billion baht for the quarter ending June, following another net loss of 22.6 billion baht in the first quarter.

The result announcements posed the airline an urgent need for a swift recovery to maintain its listed company status. Its total shareholders' equity turned negative at minus 18.1 billion baht. At the Stock Exchange of Thailand, shareholders' equity lower than zero leads to consideration of delisting. The airline is given three years to raise itself from negative shareholders' equity, before facing removal from the bourse.

The national flag carrier's total liabilities ballooned to 332.1 billion baht as of June, up 36.7% from the end of 2019.

The petition for rehabilitation accepted by the Central Bankruptcy Court gave Thai Airways an automatic stay on debt repayments. At the hearing on Monday, the court will decide whether to allow Thai Airways to advance in the rehabilitation process and to appoint a committee to draw up an actual restructuring plan.

The restructuring plan is expected to be submitted to creditors and the court for approval next year. Rehabilitation administrators will be able to begin restructuring in May or June 2021, if the process goes smoothly, according to a legal adviser of Thai Airways.

But the outlook for a swift rehabilitation is looking grim. The Tourism Authority of Thailand said revenue from international visitors in 2021 under its base-case scenario could shrink to 618 billion baht, or about 32% of the 1.9 trillion earned in 2019. The revenue will even fall to 298 billion baht in its worst-case scenario.

Slimmer earnings opportunities limit Thai Airways' ability to rehabilitate just through revenue growth and cost cuts, raising the need for capital injection. The last time it raised capital was in 2010.
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Re: Thai Airways' record $900m loss wipes out shareholder equity

Post by ExPenhMan »

For the period of 2010 to 2019, the aggregate liabilities of all the US companies filing for Chapter 11 bankruptcy is about $100 billion each year, reports Statista. And here's THAI Airways with $10.7 billion US dollars in liabilities.

Holy sheee-yittt.
The national flag carrier's total liabilities ballooned to 332.1 billion baht as of June, up 36.7% from the end of 2019.
Throw in the almost annual losses and . . .

Holy double sheee-yittt.

https://www.statista.com/statistics/111 ... hapter-11/
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Re: Thai Airways' record $900m loss wipes out shareholder equity

Post by Ot Mean Loi »

And I can kiss the AUD$1,800 that TG owes me in refunds goodbye, me thinks!

OML
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Re: Thai Airways' record $900m loss wipes out shareholder equity

Post by Bitte_Kein_Lexus »

ExPenhMan wrote:For the period of 2010 to 2019, the aggregate liabilities of all the US companies filing for Chapter 11 bankruptcy is about $100 billion each year, reports Statista. And here's THAI Airways with $10.7 billion US dollars in liabilities.

Holy sheee-yittt.
The national flag carrier's total liabilities ballooned to 332.1 billion baht as of June, up 36.7% from the end of 2019.
Throw in the almost annual losses and . . .

Holy double sheee-yittt.

https://www.statista.com/statistics/111 ... hapter-11/
I'm guessing half the management team are cousins, friends or other distant relatives.
Ex Bitteeinbit/LexusSchmexus
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Kampuchia Crumbs
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Re: Thai Airways' record $900m loss wipes out shareholder equity

Post by Kampuchia Crumbs »

Wonder how much they owe to Boeing? No like they (Boeing) has had any problems lately....
What, Me worry?
explorer
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Re: Thai Airways' record $900m loss wipes out shareholder equity

Post by explorer »

There was talk not so long ago about Warren Buffett selling airline shares at a big loss. To get some money for them was better than getting nothing.
## I thought I knew all the answers, but they changed all the questions. ##
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Re: Thai Airways' record $900m loss wipes out shareholder equity

Post by Kammekor »

Kampuchia Crumbs wrote: Sat Aug 15, 2020 2:21 pm Wonder how much they owe to Boeing? No like they (Boeing) has had any problems lately....
This is the real problem. Thai airways is just a small player, but if Thai Airways go bust, they will pull a lot of others down with them.

Imagine what will happen to Boeing if Emirates go down the drain....
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Re: Thai Airways' record $900m loss wipes out shareholder equity

Post by AndyKK »

With a world wide panademic and only hope, and foresight in the development of a vaccine, I am thinking what if? Air travel may return to its beginning, only available too the military and the wealthy. Where would this leave you and I? What alternative travel would we have on returning to our home countries.
Always "hope" but never "expect".
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Re: Thai Airways' record $900m loss wipes out shareholder equity

Post by nemo »

Trains to Europe are quite feasible, and there are ships as well.
https://www.seat61.com/
Most of them are anchored at present
https://www.cargoshipvoyages.com/
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Re: Thai Airways' record $900m loss wipes out shareholder equity

Post by AndyKK »

Yes, nemo that could be a problem, ships docked and trains not running, or borders closed. I have always thought about traveling overland, but it might not be a possibility in the near future.
Always "hope" but never "expect".
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