NOK Seeks Rehabilitation Plan as the Pandemic Causes Liabilities to Reach ฿23Bn

Nok Airlines Public Company Limited (NOK) has announced that the special meeting session 8/2020 of the Board of Directors held on July 30, 2020, the board approved NOK to lodge an application for the company to undergo rehabilitation and to provide the name of the rehabilitation planner to the Central Bankruptcy Court on July 30, 2020.

 

Mr. Wutthiphum Jurangkul, Chief Executive Officer of NOK, stated that the coronavirus outbreak and the lockdown, caused the company to be unable to do business. Currently, the company has total liabilities of 26 billion baht, compared to its total asset value of 23 billion baht.

 

The Central Bankruptcy Court has issued an order to accept the rehabilitation petition of the company for consideration. In this connection, the Central Bankruptcy Court has set the date for the hearing on the rehabilitation petition of the company on October 27, 2020.

 

The key points of NOK’s rehabilitation plan are as follows:

1) The company as the debtor decided to lodge a rehabilitation request as the company considers it to be the most suitable course of action given the financial circumstance due to the current operating environment in order to sustain undisrupted operations of the company under the supervision of the Central Bankruptcy Court.

2) The company has no intention to terminate or liquidate its business but resolves to continue its business and return to profitability. It must be noted that the on-going situation of Covid-19 pandemic and adverse operating environment has been the key drivers leading to the decision to undergo restructuring to enable the company to be a viable entity in the long run and not as a result of mismanagement.

3) The rehabilitation process will facilitate effective and meaningful turn around of business for all the company’s stakeholders through the legal framework. It will also allow the company to continue its passenger, air cargo and air courier operations without interruption throughout the rehabilitation process.

 

The initial rehabilitation plan is as follows;

1) Debt restructuring by considering fair treatment of all the company’s stakeholders in line with the company’s financial situation.

2) Based on the company’s plan to adjust its aircraft fleet, route network adjustment, commercial strategies to generate a higher level of income, organizational restructuring, cost optimization and greater efficiency in human resource management.

 

The company has nominated Grant Thornton Specialist Advisory Services Co., Ltd; Mr. Prinya Waiwatana; Mr. Tai Chong Yih; Mr. Kasemsant Weerakun; Mr. Wutthiphum Jurangkool and Mr. Chavalit Uttasart to act as NOK’s rehabilitation planners.

 

NOK stated that the rehabilitation filing is an essential step to ensure that the company will return to sustainable operations which will be beneficial to all stakeholders including our passengers, partners, suppliers, creditors, debtors, employees, shareholders, the general public and the development of the Thai economy.

The current environment during Covid-19 presents an opportune time for the company to undertake rehabilitation as the process will most likely be a short one. The company intends to complete its rehabilitation process in time to return to full service post the covid-19 pandemic.