Creditors vote in favour of AirAsia X restructuring plan – source

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KUALA LUMPUR (Businesshala) – All three groups of creditors for Malaysian long-haul low-cost airline AirAsia X (AX) have agreed to a restructuring plan that seeks to pay down just 0.5% of the debt and terminate all existing contracts. offers, said a person familiar with the matter.

FILE PHOTO: Air Asia airplanes are pictured on the haze-covered tarmac at Kuala Lumpur International Airport 2 in Sepang, Malaysia September 18, 2019. REUTERS / Lim Huey Teng

AAX said on Friday that the first of the three groups had voted 100% in favor of a plan to restructure 33.65 billion ringgit ($8.1 billion) of liabilities and the second had voted 97.6% in favor.

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The only creditor in the last group is planner Airbus, which also voted in favor of the deal, the person told Businesshala on condition of anonymity, confirming an earlier Businesshala News report.

An AAX spokesperson declined to comment, saying voting is ongoing. AAX shares climbed 33% on Friday to hit their highest level since Nov.

AAX said last month that the airline faces liquidation if creditors do not agree to the plan, after which 500 million ringgit equity will be raised.

It is one of several carriers in the Asia-Pacific region that has entered a court-monitored debt restructuring process to avoid the pandemic. Others include Malaysia Airlines, Virgin Australia, Thai Airways and Philippine Airlines.

AAX required 75% of each of the three classes of creditors to approve the plan to proceed.

The first category of AAX creditors include airports, financial institutions and maintenance providers, according to a 127-page explanatory statement for the meeting of creditors seen by Businesshala.

The second class includes engine suppliers, lessees, business creditors, travel agents and passengers, the document said.

The document states that half of the airline’s total liability is the cost of liquidating airplane orders from Airbus for 78 A330neo widebodies and 30 A321neo narrowbodies.

AAX also said it is in talks with the lessees of the 29 aircraft and some other creditors for continuing or future business relationships on commercial terms.

The airline said in the document that 0.5% of the outstanding debt on each creditor will be paid from operating cash flows one year after the debt restructuring takes effect.

AAX also proposed that if it were to achieve more than 300 million ringgit in annual income before interest, taxes, depreciation and amortization, lease rentals and restructuring costs during its 2023-2026 fiscal years, all except Airbus Creditors will be entitled to 20%. those earnings.

Reporting by Liz Lee in Kuala Lumpur and Jamie Freed in Sydney; Editing by Jacqueline Wong and Lincoln Feast

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