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KUALA LUMPUR (Oct 29): AirAsia X Bhd plans to review its US $ 15.3 billion (RM63.5 billion) debt restructuring plan to address concerns raised by a creditor as its cash is rapidly depleting said people with direct knowledge of the matter.
The low-budget carrier is trying to reconstitute the $ 15.3 billion of unsecured debt into a principal amount of RM200 million ($ 48 million) and forfeit the rest.
But creditor Malaysia Airports Holdings Bhd (MAHB) filed suit last week to claim RM78 million owed by AirAsia X and a separate request to be excluded from the restructuring scheme, arguing that its debts were secured.
A source, who was not authorized to speak publicly about the plans, told Reuters that legal action against the airline could delay its debt restructuring plan and make an offer to avoid liquidation.
The source said that AirAsia X, the long-range arm of AirAsia Group Bhd, has less than six months of cash left and has been looking to convene a meeting of creditors to vote on the scheme.
“You need to go ahead and have that meeting ASAP,” the person said.
“Fundraising is expected to take at least a couple of months, so it is imperative that the company complete the restructuring in January or February.”
AirAsia X declined to comment.
Airport operator MAHB said on Sunday that its attempt to recover AirAsia X’s debt would not derail the airline’s plan.
But the lawsuit follows a similar action taken by another creditor.
Aircraft lessor BOC Aviation Ltd filed a lawsuit against AirAsia X and its subsidiary in August to claim $ 23 million in debt and earlier this month asked to intervene in the airline’s court application for its plan.
The airline’s restructuring proposal needs the approval of creditors who own at least 75% of the total value of the debt, with the source saying that most of the figure is tied to future aircraft orders and grants Airbus SE almost 75% alone.
“No creditor will want to make a decision if they don’t know what the outcome with MAHB is,” said another source, adding that MAHB might have the financial stamina for a legal battle, but AirAsia X does not.
After the restructuring, the airline plans to raise up to RM500 million to restart the company, it said on Monday.
AirAsia X shares have hit record lows in the past three weeks.
Read also:
Strong haircut for creditors to bail out AirAsia X
AirAsia X confirms MAHB demand for RM78m aeronautical cargo
AAX confirms BOC’s request for intervention related to the debt restructuring plan
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