Budget long-haul airline AirAsia X Bhd confirmed in a bourse filing on Monday that the Kuala Lumpur High Court ordered it to convene separate meetings. Each meeting will involve a different group of AirAsia X’s creditors. All meetings must take place within 180 days from the date of order.
In the bourse filing, AirAsia X provided information about these meetings. These meetings will take place with the intentions of “considering and, if thought fit, approving with or without modification the Proposed Debt Restructuring to be proposed by AAX (AirAsia X) and the creditors”. AirAsia X did not mention the date of the order in the filing.
Events in the High Court
According to the Kuala Lumpur High Court’s ruling made on Friday, authorities will place all aircraft lessors into the category of unsecured creditors. Airbus SE, the European aerospace corporation which manufactures AirAsia X’s planes, will also receive the same label as an unsecured creditor. However, Airbus will also receive separate classification from other unsecured creditors.
On Friday, the High Court completed the task of separating AirAsia X’s creditors into three categories. As stated in the previous paragraph, two of these categories consist of aircraft lessors and Airbus respectively. The third category consists of just one entity: Malaysia Airports Holdings Bhd (MAHB). MAHB manages 39 airports in Malaysia as well as the Sabiha Gökçen International Airport in Istanbul, Turkey.
In the decision which Judicial Commissioner Ong Chee Kwan made, Ong concluded that “proprietary claims” of the creditors played no role in the case. He also denied any possible connections to the creditors’ rights with third parties. In addition, the court stated that AirAsia X failed to demonstrate the potential to improve its financial condition in the near future.
“It is contended that AAX has failed to demonstrate that it is viable, feasible, or workable to turn the financial predicaments of the company around. This is because there is no certainty of fresh injection of capital or entry of a white knight to facilitate the survival of AAX,” Ong said as part of his judgment.
Further Information
AirAsia X owes a total of RM64.15 billion at the moment. The airline currently seeks methods by which it can restructure its sizable debt. According to a company document, AirAsia X recently proposed a separate restructuring scheme. If successful, it will recover much of the rental-related financial loss it suffered.
Aviation analytics firm Cirium recently compiled data about some of AirAsia X’s lessors. Cirium’s data showed that nine lessors have exposure to AirAsia X at a quantity of 16 Airbus A330-300s.
AirAsia X intends to announce further developments to Bursa Malaysia Securities Berhad in due time.
by Weijun
23rd February 2021 15:17
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