The Board of Directors of Nok Air (DD, Bangkok Don Mueang) has announced plans to hold a second share capital increase.
In a disclosure to the Stock Exchange of Thailand (SET) last week, the Thai scheduled carrier said its board had resolved to boost its share capital by THB1.207 billion baht from the existing registered capital of THB1,292,249,882 to THB2,499,249,882. This will be done by through the issuance of 1,207,000,000 new ordinary shares with a par value of THB1 per share. Existing shareholders can subscribe to the new stock which is being offered at THB1.50 (USD0.045) per share.
This new offering is slated to take place on September 29, 2017, provided it secures shareholder approval during an EGM scheduled for September 20.
Nok Air plans to use the proceeds for working capital and to improve the fleet, including expansion of routes and flight network. Nok Air raised THB1.22 billion (USD36.7 million) through a similar offering in May which shareholder Thai Airways International (TG, Bangkok Suvarnabhumi) declined to participate in. At the time, Thai Airways cited Nok Air's "unclear" turnaround plan and the likelihood that a payment of THB588 million (USD117.7 million) would further complicate its already precarious financial standing. Thai's stake in Nok Air was subsequently diluted from 39.2% to 21.6% and could be further diluted should it decline to participate in this next issuance.
According to the Bangkok Post, Nok Air's plan to hold a further share issuance exercise, to allow for the entry of foreign strategic partners, will not happen until next year.
"We will then have enough resources to successfully execute the business turnaround," Nok Air CEO Patee Sarasin said in an interview.
