Creditors of Thai Airways have until 2 November to apply for debt repayment under the airline’s proposed rehabilitation.
There are no extensions, and failure to submit a debt repayment application within the one-month deadline results in a waiver of all creditor rights to debt repayment under Thai law.
This coincides with another deadline presented specifically to lessor creditors on 21 October by the Thai flag carrier’s chief financial officer (CFO).
Lessors involved in the talks tell Airfinance Journal that it is a “best-bet-wins game”, meaning the airline has only told lessors to furnish it with new proposals for their existing aircraft on lease to the carrier - without any predefined criteria.
Last week the CFO said that the flag carrier does not foresee a meaningful market recovery until 2025, and as such Thai Airways will need to reduce its fleet, as well as aircraft variants.
After a Bangkok bankruptcy court approved the flag carrier’s application for business rehabilitation on 27 May, an automatic stay on creditor claims came into effect, restricting the ability of creditors to enforce any security or start any other litigation proceedings against Thai. It also imposed a moratorium on creditors’ rights, including – crucially for lessors – the right to pursue action to repossess property subject to lease or hire-purchase.
Thailand’s official receiver recently told all existing or potential creditors of Thai Airways that all liabilities for debt repayment will be managed by the plan preparer in charge of Thai’s rehabilitation.
However, in order to qualify for debt repayment consideration and management under the rehabilitation plan, a creditor must first submit a completed debt repayment application within one month from the date of publication of the announcement, which in this case will be 2 November.
“Applications for debt repayment must be completed online via the Legal Execution Department’s website. Since creditors should be prepared to defend against objections to their debt repayment applications and, possibly, object to those of other creditors, it is advisable to consider or otherwise consult with counsel prior to entering into the debt repayment process,” notes John Frangos, a partner and deputy director of Tilleke & Gibbins' dispute resolution group, based in Bangkok.