Thai Airways raising $339-million loan for refinancing purposes

News Update

Thai Airways International PCL said it expects to conclude a bank loan deal worth THB11 billion ($338.67 million) for refinancing purposes around September or October.

"Previously, we planned to raise this amount via bonds. But given ample liquidity in the financial system and intense lending competition among banks, financial costs on the loans and the bonds are almost the same," Thai Airways' vice president of investor relations Raj Tanta-Nanta told Dow Jones Newswires.

He said given easier access to cheap loans, the airline does not see the need to pay arranging fees "and go through the complicated process of bond issuance." However, he noted that the airline can still switch back to bonds should the loan deal fall through.

Shareholders have already approved the issuance of THB11 billion in bonds this year, but the airline's president, Piyasvasti Amranand, recently said the board might opt for bank loans instead.

Thai Airways is undergoing a major restructuring, with Piyasvasti vowing when he took office last October to make sweeping changes to revamp the airline, which has long been plagued by concerns over its transparency and accused of rewarding politically-connected executives.

Source: mb.com.ph – 8th July 2010

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