AirAsia X, the long-haul subsidiary of AirAsia Group, is reportedly aiming to convene creditor meetings by the end of October 2021 to vote on the airline’s restructuring plan.
AirAsia X chief executive officer Benyamin Ismail told Reuters on September 17, 2021, that talks with its creditors about AirAsia X’s plan to revive the cash-strapped airline and return debt are in final stages.
“We’re quite confident that we’ll get this through. The main commercial terms are already out of the way,” Ismail said.
AirAsia X seeks to restructure its total debt of 64.15 billion ringgit ($15.4 billion).
On February 22, 2021, the Malaysian High Court granted AirAsia X the approval to convene separate creditor meetings until August 2021. The meetings are for “considering and, if thought fit, approving with or without modification the Proposed Debt Restructuring to be proposed by AAX [AirAsia X – ed. note] and the creditors,” AirAsia X wrote in a statement.
On September 15, 2021, Malaysia’s Court gave additional time for AirAsia X to convene its creditor meetings. With the latest Court’s approval to extend the deadline, the long-haul subsidiary of AirAsia Group will have time until March 2022.
On July 1, 2021, AirAsia X shareholders had approved the airline’s restructuring plan, marking a major milestone in the airline’s attempt to survive.
However, to start the airline’s restructuring, the plan needs approval from its creditors holding at least 75% of the total value of the debt.
A Reuters report dated January 2021 indicated that most AirAsia X creditors supported its restructuring plan.
However, some of the AAX creditors, such as BOC Aviation, have filed affidavits in the High Court of Malaya to intervene with the proposed restructuring plan, arguing that the airline is “hopelessly insolvent”. In December 2020, Airbus, the airline’s biggest creditor, also filed a lawsuit in which the company warned that if AirAsia X proceeded with the restructuring plan, Airbus would lose more than $5 billion worth of aircraft orders.