Thailand to pay $54m debt, seeks release of prince's plane

Thailand's Crown Prince Maha Vajiralongkorn reads a statement at the opening ceremony of the first session of Thailand's new parliament at the Ananta Samakhom Throne Hall in Bangkok August 1, 2011.

BANGKOK (Reuters) - Thailand's government has provided a bank guarantee letter to a German court for 38 million euros ($54 million) so a plane impounded in Germany and owned by the Thai crown prince can be released, a foreign ministry official said on Tuesday.

Thailand would pay the 38 million euros demanded by a German court to cover an outstanding debt dating back more than 20 years to Walter Bau, a defunct German construction firm. The amount should be sufficient to also enable the release of a Boeing 737 belonging to Crown Prince Maha Vajiralongkorn and seized in Munich last month.

"We put up 38 million euros that the Berlin court requested as a bond in the main case, so they cannot seize the aircraft," Chavanond Intarakomalyasut, secretary to Foreign Minister Kasit Piromya, told Reuters.

"We have put up a letter of guarantee in this case," he said, adding that Thai state-run Krung Thai Bank had provided the letter.

It was not immediately clear whether the court had accepted the bank guarantee and had released the plane, or if the Thai government had deposited any money or not.

The issue has been highly contentious and outraged Kasit, who said the plane was not the property of the Thai government and should therefore never have been impounded.

Crown Prince Vajiralongkorn issued a statement on July 31 offering to pay a separate bond worth 20 million euros from his personal funds to the court to have the plane released and ensure no damage to the diplomatic relationship between Thailand and Germany.

The court had requested the deposit because it had not yet determined whether the jet was owned by the price, or the Thai air force.

The initial dispute goes back two decades to when German company Dywidag helped build a 26 km (15 mile) toll road to Don Muang airport, formerly Bangkok's main international airport and now the capital's domestic terminal.

Dywidag merged in 2001 with Walter Bau, which later became insolvent.

(Reporting by Chalathip Thirasoonthrakul and Jutarat Skulpichetrat; Writing by Martin Petty; Editing by Ed Lane)