(Bloomberg) -- Thai budget carrier Nok Airlines Pcl obtained court approval to proceed with a debt rehabilitation plan as it weathers a slump in passenger demand due to the coronavirus pandemic.
The nation's Central Bankruptcy Court said Nok Air should submit its plan by the first quarter of next year, the company said in an exchange filing Wednesday.
The pandemic has devastated global aviation, forcing airlines to suspend flights, lay off employees and seek financial help from governments and investors. Thai Airways International Pcl, which holds a 13% stake in Nok Air, has also received court approval to restructure its 350 billion baht ($11.2 billion) of debt as the virus wreaks havoc on the tourism-dependent nation.
For more: Thailand to Offer $769 Million in Loans to Pandemic-Hit Airlines
Nok Air's liabilities were 34.8 billion baht at the end of June and it had negative shareholders' equity of 5.9 billion baht, according to an August exchange filing. Current assets only accounted for about 28% of total assets.
The low-cost carrier is based out of Bangkok and flies various short-haul routes to China, Vietnam and other parts of Thailand. It had initially lodged an application with the Central Bankruptcy Court back in July.
The court on Wednesday approved the appointment of Grant Thornton Specialist Advisory Services, Nok Air CEO Wutthiphum Jurangkool and three other board members to prepare the rehabilitation plan. Creditors may apply for the repayment of their money by submitting an application within one month.
A resolution to liquidate Nok Air's joint venture with Scoot, the low-cost arm of Singapore Airlines Ltd., was made in June.
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