Krung Thai mulls Nok Airlines stake sale

Lender to review Nok's competitiveness and financial soundness before it would divest its 10% stake.

Krung Thai Bank is considering whether to sell its 10% stake in the low-cost carrier Nok Airlines as part of its policy to divest non-core businesses, said president Apisak Tantivorawong.

Thai Airways International (THAI), the largest shareholder with 39% in Nok, had proposed to buy the stake held by KTB several months ago. The bank, however, wants to review Nok's revised business plan and its competitiveness before making the decision, especially in light of the emergence of the industry's new player, Thai Tiger Airlines.

Another decisive factor is the selling price relative to Nok's book value, as well as discounted cash flow. Currently, Nok's book value is lower than its par value as the airline has only recently managed to turn a profit.

"Importantly, if we decide to sell the stake, it will be more due to the fact that the airline is a non-core business rather than because of Thai Tiger. We are concerned about overlapping management in Nok and Thai Tiger, as they both have the same major shareholder," Mr Apisak said.

View the full story in Bangkok Post.