Thai Airways International Public Company Limited (SET: THAI) has announced the Board of Directors’ resolution to decrease its registered capital by reducing par value from 10.00 Baht per share to 1.30 Baht per share.
THAI stated that the meeting of the company’s plan administrators on 25 February 2025 resolved to approve the decrease of the company’s capital by reducing the par value of the company’s shares from 10.00 Baht per share to 1.30 Baht per share in order to make up for the accumulated accounting losses of the company as close to zero as possible, which will decrease the company’s registered capital and paid-up capital from 283,032,915,670.00 Baht to 36,794,279,037.10 Baht.
In this regard, the company stated that this action does not cause any loss to creditors or the company. The reduction of par value of the shares, in terms of accounting, involves using the share premium resulting from reducing par value to offset the share discount and the accumulated losses, bringing the accumulated losses close to zero.
However, this does not affect the total shareholders’ equity in the financial statements of the company, i.e. the shareholders’ equity in the separate financial statements of the company for the year 2024 remains at 45,495,026,125.00 Baht, in accordance with the conditions or completion of the business rehabilitation plan under Clause 10.10.
Additionally, this does not affect the value of the company or the value per share since the value per share is not determined by the par value of shares. Furthermore, the absence of accumulated losses and the ability to consider paying dividends in case that the business is profitable make the company more attractive to investors.
This means that creditors, who have converted their debt into equity and become shareholders of the company, as well as related stakeholders and the overall business rehabilitation of the company will directly benefit from the stability of the share price and the potential dividend payout in the future, or if the company wishes to raise additional funds by issuing new shares to be used in business operations or to pay off debts according to the business rehabilitation plan in the future, the company can proceed without being hindered by accumulated losses, which is merely accounting figures.
After the company obtains approval from the Central Bankruptcy Court to register the capital decrease with the Department of Business Development, Ministry of Commerce, the company will proceed with the registration of the capital decrease with the Department of Business Development, Ministry of Commerce, and the company will further provide updates on this matter accordingly.
