The National Economic and Social Development Board (NESDB) has sent back Thai Airways International Plc (THAI)'s plan to buy a new fleet of 23 aircrafts worth about Bt100 billion citing concerns over its financial status and fierce market competition.
An unidentified source from THAI said the NESDB expressed unease over THAI's cash position, while viewing that its planned debenture issue may not be attractive enough for investors amid high market competition.
THAI plans to offer Bt80-billion debentures or hybrid debentures. Of the planned proceeds, Bt40 billion will be used for redemption of its matured debentures while a portion will be used to procure new aircraft.
“NESDB has asked THAI to reconsider its current financial status as the board was worried that a large amount of investment may affect the company's overall business amid high competition in the aviation industry. THAI may have to re-evaluate its profit-making plan this year for more confidence on investment," the source said.