[ad_1]
KUALA LUMPUR (Oct 10): With no signs of travel normalizing anytime soon, AirAsia X Bhd (AAX) and Malaysia Airlines Bhd want creditors to share the pain as the two airlines make one last attempt to convince their creditors that they agree to take haircuts on their debt.
The next few weeks will be crucial for the two airlines: whether they remain in the air or not will depend on their creditors with 75% of the total debt saying yes, the threshold required by the Companies Law.
On October 2, Malaysia Airlines, with AAX following suit on October 6, announced plans to restructure its outstanding debt to avoid liquidation.
AAX is asking its unsecured creditors to take a whopping 99.7% haircut on their debt of RM63.49 billion or get nothing at all.
Malaysia Airlines, meanwhile, is going to the negotiating table with its creditors to restructure a RM16 billion debt in the context that there will be no federal bailout. Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has repeatedly said that the government will not inject more funds into Malaysia Airlines and that it is up to the sole shareholder of the national airline, Khazanah Nasional Bhd, to figure it out.
Airlines have warned that without the majority support of their creditors, they could be forced to default on their debt and consider liquidation.
Will the creditors give in?
In the latest issue of The Edge, we also spoke with Malaysia Airlines Group Chief Executive Captain Izham Ismail about the proposed restructuring issue and what his Plan B entails.
Read more about this in the Oct. 12 issue of The Edge Weekly.
[ad_2]
