Thai Airways to raise foreign ownership limit

Thai Airways to raise foreign ownership limit

BANGKOK (AP): Moving closer to privatization, Thai Airways International said Thursday its shareholders have agreed to a plan to increase its capital and raise its foreign shareholding limit.

The planned recapitalization is a major step toward privatization, in which the Finance Ministry's stake in the national carrier would be reduced to 70 percent. The ministry currently holds 93 percent stake and the remaining 7 percent share is listed on the Stock Exchange of Thailand.

In a filing to the stock exchange, Thai Airways said the shareholders have agreed to expand the airline's capital by 3 billion baht (US$68.8 million) to 17 billion baht ($389.9 million) through an issue of 300 million new shares with a par value of 10 baht ($0.23) each.

It was also agreed to raise the airline's foreign shareholding limit to 30 percent of paid-up capital from a 10 percent limit set by the airline's original articles of incorporation, the filing said.

By making the change, the airline will be able to sell a full 10 percent stake to a strategic partner who has yet to be named. Foreign investors own more than half of the 7 percent of shares currently on the market, according to The Nation newspaper.

Of the 300 million new shares, 127.5 million shares will be offered to the strategic partner through a private placement, the statement to the stock exchange said.

Another 157.5 million new shares will be for a public offering, while the remaining 15 million shares will be offered to the company's employees, it said.

Pricing details and offering periods of each allotment are to be determined later by the company's board, Thai Airways said.

Thai Airways had earlier planned to hold a public offering in November with the private placement taking place within four to six months after the public offering.

The company has said, however, that the timing of the allotment will depend mainly on the market environment.