Thailand’s Finance Ministry expects to inject THB7.5 billion in the upcoming recapitalization of Thai Airways International in a move to maintain its 51% stake in the national carrier.
According to Dow Jones Newswires, the Finance Ministry has already prepared the funds for the recapitalization, which is expected to take place in late September.
Thai Airways will conduct a roadshow to investors in early September in a move to attract investors for its THB15 billion fund raising.
Thai Airways and Tiger have have signed a memorandum of understanding to launch Thai Tiger Airways, new low-cost airline should be operational by first quarter 2011.
Based in Bangkok, the carrier will operate domestic and international routes and will operate under the business model of the low-fare part of the Tiger Airways Group.
“Thai will hold 51% share of the new company”, said president of Thai Airways Piyavasti Amranand – while the remaining 49% will remain in the hands of Tiger Airways. “This company has proven to be the correct approach to the market to compete low-cost market in Asia and we are pleased to have made this agreement”.
The board of the new carrier will be composed of five members, three from Thai and two from Tiger.
The planned joint venture had not been cleared with the major share holder of Thai – the Thai Government, according to Bangkok Post.
The management of Thai Airways International must give a clear explanation to the Ministry of Transport about its Thai Tiger Airlines joint venture plan, Transport Minister Sohpon Zarum said at the parliament on Wednesday morning.
“I got into the muddle when I first learned about THAI’s plan to join with Tiger Airways Holdings to set up a no-frills carrier in Thailand. The completion of the joint venture deal was too fast,” the minister said.
Mr Sohpon confirmed that he had ordered his ministry’s permanent secretary to send a letter to the national flag carrier demanding its top management explain whether the deal would affect Nok Air, its affiliate low cost airline. The management must also make it clear whether Thai Tiger Airlines would snatch clients from THAI, he added.
He insisted that the demand for an explanation was not interference in THAI’s internal affairs. His ministry had a duty to oversee and control THAI.
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