Thai Summit Heirs Taking Over Nok Air from THAI?

31st May 2017

Thai Airways International’s (THAI) position as the number one player in Nok Air is in serious jeopardy after the former declined to buy new shares and warrants offered by the budget carrier in a capital increase this month.

Although the national carrier remains the single largest shareholder in Nok Air, with 21.6% of shares, its position is threatened by Thaveechat and Nuttapol Chulangkul. The two brothers, who are in line to succeed Thai Summit Group, have a combined 28.9% share in the carrier now. Of this, Mr. Thaveechat holds 15.6% and Mr. Nuttapol 13.3%. Before the May rights offering THAI held 39.2%, Mr. Thaveechat 10.2% and Mr. Nuttapol 12.1%.

According to Stock Exchange of Thailand, Chai Srivikorn, co-owner of shopping center Gaysorn and head of Ratchaprasong Square Trade Association holds 2.8% of Nok Air shares, Siam Commercial Bank has a 1.9% share, Nok Air Chief Executive Officer Patee Sarasin owns 1.3%, the same as Suwit Sampattanavorachai, followed by Barclays Capital Securities Ltd at 1%, Tassana Vichachareon’s 0.74% and finally Boonsong Semsrisiwan’s 0.6%.

An analyst at KGI Security, Parin Kitchatornpitak commented on what this could mean for Nok Air’s future, saying that the Chulangkul brothers could come up with new management ways and business strategies to recoup Nok Air’s losses.

He said:

Thailand's budget aviation segment has been highly competitive since the entry of Indonesia-based Lion Air. The price war led to losses for most carriers over the past few years. We remain less optimistic about Nok Air's outlook, due to its continued poor earnings. Its gross margin is expected to remain unprofitable during the period. Moreover, Nok might see increases in operating expenses due to aircraft maintenance and expenses for engine shop visits.

Nok Air launched a rights offering for new shares in mid-May, with the idea to raise 1.5 billion baht from selling 625 million new shares to current shareholders. However, its major shareholder THAI refused the offering, opening up a spot for the brothers.

The budget carrier incurred a net loss of 296 million baht in the first quarter of this year. This means its accumulated net losses are now 3.72 billion baht. Nok Air also posted net losses at 471 million baht in 2014, 726 million baht in 2015 and 2.76 billion baht in last year.

Related Airlines

• Nok Air
• Thai Airways

Related News

Nok Air announces new routes

Nok Air to fly between Bangkok Hyderabad

Singapore Airlines and Thai Airways Expand Code-sharing

Thai consider adding 20 Twin-Aisle Jets

Related Travel Guide Articles

Thailand Airlines Comparison