AirAsia X shows court creditors’ support for restructuring plan

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In this news, we discuss the AirAsia X shows court creditors’ support for restructuring plan

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KUALA LUMPUR (Reuters) – Most of AirAsia X Bhd (AAX) backers back restructuring plan, and Malaysian airline has attracted interest from potential investors in fundraising after the reorganization, documents show court cases filed this month.

In emails attached to court documents, supportive donors have said they want to continue talks with the low-cost airline and potential new investors, looking for more level terms and new trade deals.

The affidavits come after more than a dozen creditors filed to intervene in its court-supervised restructuring plan, with lessor BOC Aviation Ltd and airport operator Malaysia Airports Holdings Bhd arguing that AAX is “hopelessly insolvent.”

Planemaker Airbus SE also filed an affidavit last month claiming it could lose more than $ 5 billion in aircraft orders if the low-cost long-haul carrier continues with the plan.

AAX’s senior legal adviser, Shereen Ee, said in court documents seen by Reuters that 15 out of 20 aircraft lessors were not in favor of the AAAX liquidation, and three other players – Airbus, Rolls- Royce Group and BNP Paribas – “did not object” to the restructuring plan.

Lenders in favor of a restructuring include Macquarie Aircraft Leasing Services and Aircastle, according to the documents. Rolls-Royce, Macquarie Aircraft Leasing Services and Aircastle did not immediately respond to requests for comment.

An Airbus spokesperson declined to comment, saying the company was continuing discussions but details were confidential. AirAsia X also declined to comment.

BNP Paribas – which is a fiduciary acting on instructions from creditors – declined to comment.

Aircastle Asia-Pacific executive vice president Nigel Harwood told AAX in an email that his company was not looking to liquidate the airline, according to court documents.

“We look forward to working with you to come to a revised trade agreement once we understand your future business plan with the introduction of new investors,” he said.

Macquarie’s email indicated that he was ready to back a recapitalized AAX and enter into a restructured lease provided the airline has a detailed business plan, credible third-party investors, and lessors have a say. say, according to the documents filed.

AAX said it has received 10 letters from Malaysian and Singaporean companies and high net worth individuals indicating their interest in participating in its proposed fundraising exercise, according to an affidavit.

The 10 includes Tune Group Sdn Bhd, owned by AirAsia Group Bhd co-founders Tony Fernandes and Kamarudin Meranun. Tune is the largest shareholder of AAX, with a 17.83% stake.

AAX said it has also attracted interest from one publicly traded financial group and the subsidiary of another, both preferring not to be named.

AAX, a subsidiary of AirAsia Group, announced last month that it plans to raise up to 200 million ringgit ($ 49.49 million) by issuing shares to new investors after its debt restructuring.

The airline is seeking to restructure Ringgit 64.15 billion in debt. Its accrued debt stands at 2.24 billion ringgits, without taking into account possible debts such as its large aircraft order book with Airbus.

Some donors have argued that Airbus orders should be excluded. However, AAX said contingent debts need to be addressed and will be reduced by renegotiated leases and other commercial contracts.

AAX estimated that lessors who would continue with the airline after the restructuring would be able to recoup around 44-66% of their rental loss under new agreements.

($ 1 = 4.0410 ringgit)

(Corrects affidavit “ lawsuit ” in paragraph 4, BNP clarifies representation of more than one creditor in paragraph 8)

Reporting by Liz Lee; Editing by Jamie Freed and Gerry Doyle

Original © Thomson Reuters

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