AirAsia X to hold crucial creditors meeting to vote on debt restructuring plan on November 12
KUALA LUMPUR (October 18): In a crucial step in determining its future, AirAsia X Bhd (AAX), the low-cost long-haul subsidiary of AirAsia Group Bhd, will hold a meeting with the plan’s creditors on November 12 to vote on its proposed plan to restructure the 63.5 billion ringgit debt.
In its explanatory statement and notice of a court-convened meeting for the creditors of the October 18 scheme seen by theedgemarkets.com, the financially troubled carrier is expected to hold separate meetings for the three categories of creditors – including those creditors who have a guarantee on the assets of AAX. including airport operator Malaysia Airports Holdings Bhd and financial institutions (class A), creditors who have unsecured claims against AAX, including engine suppliers and aircraft lessors (class B) and l aircraft manufacturer Airbus Group (class C) – the same day.
The proposed debt restructuring requires the approval of at least 75% of the total value of the debt that votes in each category of creditors. Failure to obtain creditors’ approval to restructure its business is likely to result in the carrier becoming insolvent and causing significant losses to its stakeholders.
“In a suspected liquidation scenario of AAX, the estimated recovery for AAX’s creditors is zero,” AAX warned in its statement.
The Kuala Lumpur High Court recently gave the AAX until March 17 next year to hold a creditors meeting to review the debt restructuring plan.
As part of its debt restructuring plan, the carrier aims to replenish 63.5 billion ringgit of its debt in an IOU for a principal amount of up to 200 million ringgit by reducing 99.9 billion. % of its issued share capital, as well as one proposed share. consolidation of 10 existing shares of AAX into a single share.
It also proposes an issue of waiver of rights of new shares to raise gross proceeds of up to RM300 million from its existing shareholders, as well as a proposal to issue and allot new AAX shares to raise RM200 million. Additional RM.
According to AAX’s explanatory statement, all aircraft lessors have two options: either continue to lease their aircraft to AAX under new lease conditions, or accept the termination of the lease in accordance with the regime under which the affected aircraft will be returned. to the lessor. . There are currently 29 planes leased from lessors. It had RM444.32 million in receivables owed to lessors for rents and end-of-lease payments as of June 30, 2020.
As of October 8, 2021, two lessors, namely International Lease Finance Corp and Sky High I Leasing Co Ltd, have exercised or indicated their intention to exercise their right to terminate the lease agreements under existing documents with AAX and to return their respective planes. to them, according to AAX.
âThey also indicated their support for the project and to vote in favor of it. For those lessors who have not exercised their right to terminate, those lessors are evaluating their options under the program and AAX expects to receive similar support in due course, âthe carrier said.
Among the creditors of the scheme, BNP Paribas, Singapore Branch (in its capacity as Security Trustee for UK Export Credit Guarantee Department), Honeywell International Sdn Bhd, SociÃ©tÃ© Air France, Thales Solutions Asia Pte Ltd and Bridgestone Aircraft Tire Co (Asia) Ltd have indicated their support for the project and to vote in favor of it, he added.
âFor all other commercial or commercial creditors with whom AAX has had business relations but has not entered into discussions and / or negotiations on the date of the explanatory memorandum due to time constraints or other, AAX is open to the pursuit of business relationships and will be able to negotiate new business terms and agreements based on the requirements of the AAX and subject to the terms and conditions and market circumstances in effect at the relevant time, if and when the program is approved by the program’s creditors and sanctioned by the High Court, âsays AAX.
If AAX’s proposed debt restructuring plan is approved at the creditors’ meeting, then it will seek sanction from the High Court for the proposed plan.
For the 18-month fiscal year ended June 30, 2021, AAX had negative equity of RM31.53 billion and its current liabilities of RM32.65 billion exceeded current assets by RM 0.39 billion by 32 , RM 26 billion. Its accumulated losses amounted to Ringgit 33.06 billion.
Shares of AXA closed up 0.5 sen or 5.26% at 10 sen last Friday (Oct. 15), valuing the carrier at RM 414.81 million. Its share price has risen 25% since the start of the year.