Mr. Le Thai Sam
In July 2023, the Board of Directors of Bamboo Airways approved the appointment of Mr. Le Thai Sam as the Chairman of the airline. However, in early February 2024, Bamboo Airways dismissed Mr. Le Thai Sam and appointed Mr. Phan Dinh Tue to the aforementioned position. Although Mr. Le Thai Sam’s time in office was short-lived, it is noteworthy that the third largest airline in Vietnam has implemented various restructuring policies to overcome difficulties.
The person who borrowed over 7,700 billion VND from Bamboo Airways
Mr. Le Thai Sam, born in 1964 – Year of the Rat, graduated from the Ho Chi Minh City University of Economics. In an introduction by the FLC Group in 2022, Mr. Sam has over 30 years of experience in investment, business in real estate, trade services, finance, and banking.
He is also introduced as “a deep understanding of the investment environment” and has extensive experience in building investment strategies, risk management, and market analysis in Vietnam. In addition, Mr. Sam has many cooperative relationships with investment funds, organizations, and large economic corporations both domestically and internationally.
From 2016 to 2020, Mr. Le Thai Sam was a Member of the Board of Directors of Suoi Dau Industrial Park Joint Stock Company (Sudazi). This company is responsible for developing the Suoi Dau Industrial Park project with a scale of 133.95 hectares in Cam Lam district, Khanh Hoa province. Mr. Sam also had working experience at the Khanh Hoa Provincial Department of Industry, and the Khanh Hoa Provincial Department of Culture and Information.
This businessman was also a Member of the Board of Directors of DIC Investment and Trading Joint Stock Company (DIC Corp, stock code: DIG). Specifically, Mr. Sam worked at DIC from March 2009 to May 2012, before submitting a resignation letter for “focusing on personal business.” In addition, he was also a Member of the Board of Directors of FLC Group.
Mr. Le Thai Sam first appeared at Bamboo Airways at a time when the airline was facing difficulties due to Trinh Van Quyet and key leaders of FLC being involved in a legal case. When elected Chairman of the Board of Directors of Bamboo Airways, he was also introduced as the representative of over 50% of the airline’s shares.
Mr. Le Thai Sam is in the middle of the photo.
Everything started in 2022 when, to ensure regular operations as Bamboo Airways faced many difficulties, especially in terms of finance, Mr. Sam signed contracts for the airline to borrow cash (interest-free, low-interest, and no collateral). As of April 10, 2023, the total amount borrowed by Bamboo Airways from Mr. Sam was over 7,727 billion VND.
At the extraordinary General Meeting of Shareholders of Bamboo Airways on May 9, 2023, Mr. Sam stated that Bamboo Airways does not have a specific plan to repay the borrowed amount. Therefore, he believed that the company issuing shares to convert debt with him is necessary to ensure the rights and legitimate interests of the unsecured debt holder.
Mr. Sam proposed that Bamboo Airways issue shares to convert debt with a quantity of 1.15 billion common shares through a private placement. The expected number of shares to be issued after the offering is 3 billion shares, corresponding to a nominal value of 30,000 billion VND.
Of which, 772 million shares will be issued, corresponding to a value of 7,720 billion VND for debt conversion, and 378 million shares will be issued to strategic investors. The expected ratio of shares to be issued to the total shares after the offering is 38.3% and there are no restrictions on transferability.
Not only did Mr. Le Thai Sam borrow from Bamboo Airways, he also provided unsecured loans to FLC with a value of 870 billion VND and an interest rate of 7% per year. The lending was carried out from April to June 2022. To fulfill the obligation to repay the debt, in May 2023, FLC decided to transfer over 400 million shares of Bamboo Airways, equivalent to 21.7% of the capital held in this airline, to Mr. Le Thai Sam.
Therefore, after capital transfers from the FLC group, Mr. Le Thai Sam may have owned over 53% of Bamboo Airways’ shares.
The challenging restructuring of Bamboo Airways
Before Mr. Sam took on the position of Chairman of Bamboo Airways, the airline had faced many difficulties. Firstly, the company continuously reported business results that were somewhat unfavorable.
Specifically, in 2022, Bamboo Airways achieved net revenue of over 11,732 billion VND, 3.3 times higher than the revenue in 2021. However, due to operating at cost, Bamboo Airways had a gross loss of 3,209 billion VND. The airline stated that the cause was the impact of difficulties in the Northeast Asian market and the Russia-Ukraine conflict, which caused a sharp increase in fuel prices.
In addition to the gross loss, the increased expenses resulted in Bamboo Airways having a post-tax loss of 17,619 billion VND. In 2021, the airline also had a loss of 2,281 billion VND. The large loss in 2022 led to an accumulated loss of nearly 19,336 billion VND and negative equity of 836 billion VND for Bamboo Airways.
Bamboo Airways’ total assets as of December 31, 2022 were 18,008 billion VND, a decrease of 8,849 billion VND. Cash and cash equivalents were only over 85 billion VND, a decrease of 92.4% compared to the beginning of the year at nearly 1,123 billion VND. Bamboo Airways’ liabilities at the end of 2022 were at 18,844 billion VND, of which total borrowings were at 10,623 billion VND, an increase of 5,830 billion VND, mainly due to an increase in short-term borrowings.
In addition to financial difficulties, another reason must be mentioned, which is the arrest of Trinh Van Quyet – the founding shareholder of Bamboo Airways and many executives for the offense of “market manipulation.” Since then, the handling positions of the airline have continuously changed and stability has not been achieved.
Furthermore, the airline even faced difficulties in paying pilot salaries on time. According to information from international news, in September 2023, some pilots of Bamboo Airways resigned from the company for two months due to delayed salary payments. An anonymous source said that around 30 foreign pilots requested leave, accounting for over 10% of the total number of pilots at the airline in June 2023. Another source said that some pilots resigned while others were dismissed.
In the position of Chairman of the Board of Directors, Mr. Le Thai Sam and his colleagues have carried out a major restructuring unprecedented at the airline. First, the company found a companion on the restructuring journey, which is Sacombank (STB).
On September 15, Mr. Phan Dinh Tue, a member of the Board of Directors of Bamboo Airways, shared that Sacombank – a major creditor of Bamboo Airways – was considering investing in the airline and was undergoing procedures to obtain approval from regulatory agencies. However, as a credit institution, Sacombank’s investment in Bamboo Airways is considered a non-core investment. Therefore, the bank is in the process of pursuing procedures and seeking approval from regulatory agencies to be able to implement its investment plan.
Second, the next step of the company was to appoint Mr. Luong Hoang Nam – a Ph.D. in aviation in Russia with over 30 years of experience in the aviation-tourism industry – as the CEO.
Third, the airline has suspended international routes during the restructuring phase and focused on gaining market share in domestic routes.
Fourth, and most importantly, fleet restructuring. According to a sharing from Bamboo Airways representatives in September last year, the airline is operating planes from 3 manufacturers: Airbus, Boeing, and Embraer. Therefore, Bamboo Airways has to bear various costs such as hiring technical personnel, pilots, and trainers for each type of aircraft.
To save costs, in the second half of 2023, the airline had to cut a series of planes (retaining 10 aircraft), including ceasing operations of the Boeing 787 long-haul wide-body aircraft and only retaining profitable domestic routes. However, to serve the peak Lunar New Year travel season, the company also added two aircraft to its fleet in January 2024.
