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AirAsia X to change debt restructuring plan

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AIRASIA X Bhd (AAX), the low-cost long-haul subsidiary of AirAsia Group Bhd, is expected to file an amendment to its subpoena next week, to make its debt restructuring proposal more acceptable to the 1,200 unsecured creditors that the airline is asking to write down their dues.

This was revealed to the judicial commissioner of the Kuala Lumpur High Court, Anand Ponnudurai, by the AAX lawyer last Friday (October 30). The case arose before Anand during a case management hearing of a request by several unsecured creditors of AAX to intervene in the airline’s application for permission to hold a creditors’ meeting to vote. on its draft debt restructuring plan.

Sources say the AAX is seeking to change its subpoena, as well as some of the terms of its proposed program. It comes as more donors and creditors have spoken out against AAX’s proposed program that was leaked on October 6.

As part of its proposed plan, AAX seeks to secure at least 75% of the total debt value of its unsecured creditors to accept a 99% haircut, reducing current debt by RM2 billion and $ 61 billion. RM of future debts at RM 200 million. It also involves undertaking a 90% share capital reduction to RM 150 million from the current RM 1.53 billion, and a consolidation of 10 existing shares into one consolidated share.

We learn that besides the airport operator Malaysia Airports Holdings Bhd (MAHB) and the aircraft leasing company BOC Aviation Ltd, Macquarie Aircraft Leasing Services (Ireland) Ltd, Sky High I Leasing Co Ltd and three other creditors are the last to file an intervention request. that their objections to the proposed debt restructuring plan be heard. October 30 was initially the hearing date for AXA’s application for authorization to call a meeting of creditors for the purpose of voting on the proposed plan.

According to sources, during the case management hearing, the AAX had no objection to the request for intervention filed by the creditors, which means that the parties concerned are authorized to intervene and take a position on the matter. proposed plan.

According to sources, Anand also decided to withdraw from the case, as he had previously appeared on behalf of AirAsia in its dispute with MAHB and the Malaysian Aviation Commission before being taken out of private practice in court in November. latest.

It is understood that another case management will be held next week to schedule the authorization hearing of the affected creditors to raise the reasons for their objections to the proposed debt restructuring plan. This should be held in front of Judicial Commissioner Ong Chee Kwan.

“At the authorization hearing, creditors will then indicate whether they think the proposed plan is wrong, unfair or if they want to be excluded from the plan,” a source told The Edge.

Sources also say the hearing date for AXA’s application for permission to hold the creditors’ meeting to vote on its draft plan is also expected to be set at next week’s case management hearing. . “Depending on the judge’s schedule and subject to the availability of all the lawyers (representing the creditors of the regime), the hearing could be held at the end of November or the beginning of December. Of course, it is better for AAX to hold the meeting of creditors as soon as possible, ”adds another source.

On a recent report that AAX is considering revising its program to address concerns raised by MAHB to be excluded – as the airport operator considers it a secured creditor – sources say this was not raised during the October case management hearing. 30. “There is nothing formal to suggest their withdrawal (from the program) at this time,” a source said.

At the case management hearing, AAX was represented by Foong & Partners with Gopal Sreenevasan as lead counsel. MAHB and Sky High were represented by Claudia Cheah of Skrine while BOC Aviation and Macquarie were represented by Kwan Will Sen and Joyce Lim of Lim Chee Wee Partnership. David Hoh, attorney for Abdullah Chan, represented three other creditors.

On October 22, MAHB announced that it was suing AAX to recover RM78 million in unpaid aviation fees. The debt owed to him is less than 0.01% of the total debt owed under the proposed scheme, he added.

BOC Aviation had also filed a request to intervene in court to have its objections to the proposed regime heard. He is asking about $ 30 million in AAX membership fees.

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