TG loses appetite for Nok
Published: 26/02/2011 at 12:00 AM
Thai Airways International appears ready to abandon its bid to acquire more shares in Nok Air to gain greater control over the budget airline.
"We are reluctant to buy more shares in Nok Air," said THAI president Piyasvasti Amranand.
He said Nok was looking less attractive as an investment because of its lack of hedging against prevailing high fuel prices, and its policy to buy future aircraft instead of leasing, since buying is more capital-intensive.
THAI offered recently to buy 5 million Nok Air shares held by state-owned Krung Thai Bank for 150 million baht, or 30 baht a share. KTB maintains the shares are worth 44 baht each and has not responded to THAI's proposal.
Acquiring the shares from the bank would have raised THAI's stake in the budget carrier to 49% from 39%.
In any case, THAI is still pushing ahead with its plan to set up another budget airline, Thai Tiger Airways, which would be 51% owned by the national carrier and other Thai entities and 49% by Singapore-based Tiger Airways. Dr Piyasvasti has said the plan "will proceed at any cost".
However, the Transport Ministry remains strongly opposed to the idea and has imposed a number of new conditions beyond those contained in an agreement signed last August to create the new airline.
"Those who use power in an unethical manner may not be able to stay in office for long," Dr Piyasvasti said in an apparent reference to the ministry.
Credit: Bangkok Post (www.bangkokpost.com)
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