Cash-strapped Nok Air’s latest bid to get shareholders to inject 1.7 billion baht in fresh funds and advance a turnaround plan has been declared a success.
All shareholders — even Thai Airways International (THAI), previously a wild card — have fully subscribed to the 1.135 billion new shares offered at 1.50 baht each.
Unlike the previous round in May during which THAI failed to subscribe, the flag carrier made good on its vow this time around and took up 245 million shares worth 367.5 million baht, insiders told the Bangkok Post yesterday.
THAI was among Nok Air shareholders who almost unanimously endorsed a new round of capital injection needed for business rehabilitation at a Sept 20 meeting.
THAI ultimately honoured the commitment despite Somchai Sujjapongse, the finance permanent secretary, sounding a wary note that day. The Finance Ministry is a major THAI stakeholder.
The resignation of Patee Sarasin as Nok Air’s chief executive in mid-September was a key factor in persuading THAI to go along with the latest capital infusion. The progress being made in the carrier’s turnaround and the appointment of Piya Yodmani as Mr Patee’s successor also influenced THAI’s decision to take new Nok Air shares.
Mr Piya previously served as deputy chief executive of Nok Air and chief executive of NokScoot, the medium- to long-haul budget airline owned by Nok Air and Singapore’s Scoot.
The earlier allotment saw THAI refuse to subscribe to 114 million shares, citing Nok Air’s “unclear” turnaround plan and the likelihood of its subscription payment of 588 million baht contributing to THAI’s financial woes.
THAI acting president Usanee Sangsingkeo and other senior executives had talked about the flag carrier’s wish to go along with the latest capital increase for the sake of retaining THAI’s 21.57% stake.
They said THAI agreed to come aboard in view of a clearer turnaround plan and the prospects of Nok Air returning to the black next year after enduring combined losses of 4.93 billion baht from 2014 to June 2017.
Details of the subscription by shareholders, which ran from Oct 16 to 20, have yet to be reported to the Stock Exchange of Thailand, though insiders said there is an over-subscription.
The fresh capital will augment the 1.22 billion baht that Nok Air amassed in the previous round of share subscriptions in May.
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