AirAsia X shows court creditors support the restructuring plan

AAX, a subsidiary of AirAsia Group, said last month that it plans to raise up to RM200 million by issuing shares to new investors after restructuring its debt. (AFP photo)

Kuala Lumpur: Court documents filed this month showed that most of the AirAsia X Bhd (AAX) lessors support the restructuring plan, and the airline has received interest from potential investors to raise funds after the reorganization.

In emails attached to the court files, supportive lessors said they wanted to continue discussions with the budget airline and potential new investors, seeking more equitable terms and new business arrangements.

The written affidavits come after more than a dozen creditors filed to intervene in the proposed court-supervised restructuring, with landlord BOC Aviation Ltd and airport operator Malaysia Airport Holdings Bhd saying AAX was “hopelessly insolvent.”

Airbus SE also filed a lawsuit last month saying it could lose more than $ 5 billion in aircraft orders if the long-haul low-cost airline continues with the plan.

Sherine E, senior legal advisor to AAX, said in court documents seen by Reuters that 15 of the 20 aircraft lessors did not support the liquidation of AAX, and that three other interlocutors – Airbus, Rolls-Royce Group and BNP Paribas – “did not object.” For the restructuring plan.

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

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

BNP Paribas – a trustee who acts on the creditor’s instructions – declined to comment.

Aircastle Asia Pacific executive vice president, Nigel Harwood, told AAX in an email that his company is not seeking to liquidate the airline, according to court files.

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

The Macquarie email said it was willing to support recapitalized AAX and enter into a restructured lease agreement on the condition that the airline has a detailed business plan, trusted third-party investors and lessors have a helpful opinion, according to the filings.

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 training, according to an affidavit.

The ten companies include Tune Group Sdn Bhd, owned by AirAsia Group Bhd founders Tony Fernandez and Camaruddin Miranon. Tune is AAX’s largest shareholder with a 17.83% stake.

AAX said it has also received interest from a publicly listed financial group and a subsidiary of another group, both of whom prefer not to be named.

AAX, a subsidiary of AirAsia Group, said last month that it plans to raise up to RM200 million by issuing shares to new investors after restructuring its debt.

The airline is seeking to restructure RM64.15 billion in debt. Its outstanding debt is RM2.24 billion, without taking into account contingent debt such as a large aircraft order book with Airbus.

Some lessors have argued that Airbus’ orders should be excluded. However, AAX said that the contingent debt must be dealt with and will be reduced through renegotiated leases and other commercial contracts.

AAX estimated that lessors who continue with the restructuring after the airline’s restructuring will be able to recover approximately 44-66% of the rental loss under the new agreements.

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