The Thai Airways International Plc (THAI) board has assigned its management team to discuss continuing negotiations with London-based AvCon Worldwide Ltd over the stalled sale of one of its aircraft.
THAI board chairman Ampon Kittiampon said Tuesday the board has yet to make a decision on selling the plane.
The London firm has proposed to buy the Airbus A340-500 for US$23 million, far lower than its $66.9 million book value.
AvCon, which represents Saudi Arabia's Prince Faisal al-Saud in the deal, proposed to buy four unused Airbus A340-500s from THAI. However, the airline agreed to only negotiate the sale of one of the planes.
The company said THAI had agreed to sell it the plane and THAI had accepted a $2.5-million (79.5 million baht) deposit from the company.
But AvCon complained on Saturday that THAI had breached the agreement by cancelling the deal, while the airline management claimed the agreement was rejected by the board.
"The board has yet to make a decision on the deal, and said management must first explain how selling the plane at a price about $40 million lower than its book value is worth it in business terms," Mr Ampon said. "The board must give a reasonable explanation to shareholders as why THAI can admit such a great loss."
He said the board suggested management should either continue to negotiate with the company to increase the purchase price, or find alternatives to deal with THAI's decommissioned planes.
It also needs to study damage costs if the planes are simply left unused, Mr Ampon said.
A THAI source said yesterday the airline had set up a working group to consider the issue.
It is studying ways to sell the plane at better prices or seeking other options.
About the author
- Writer: Amornrat Mahitthirook