PETALING JAYA: AirAsia X Bhd (AAX) is expected to make some tweaks to its RM63.5bil debt restructuring plan, but this will only be to satisfy one creditor.
Sources said the scheme would be amended to accommodate Malaysia Airports Holdings Bhd (MAHB). “Seven to eight creditors have filed to intervene. They have the right to do so but they are all technical interventions. No one has objected to the proposed debt restructuring, only MAHB, ” said the source, adding that the amendments to the originating summons would be filed soon.
It was reported in a business weekly that the amendments were to make it “more palatable” to the airline’s 1,200 unsecured creditors but those familiar with the ongoing developments said that was not the case as it would only be done in the interest of the airport operator. On Oct 7, AAX filed an originating summons at the High Court for leave to convene a meeting with its unsecured creditors, of which Malaysia Airports (Sepang) Sdn Bhd (MASSB), a wholly-owned subsidiary of MAHB, is a part of.
On Oct 22, MASSB filed a lawsuit against AAX to recover RM78.16mil for various aeronautical charges, which was 0.001% of the airline’s entire debt. The following day, it filed an application to intervene and be excluded from the restructuring scheme, saying that it is a secured creditor of AAX. MAHB later said that its lawsuit would not derail AAX’s scheme.
“Looks like AAX will give MAHB what it wants, which is not to be an unsecured creditor. There will be two classes of creditors. MAHB will be in the first class, away from other unsecured creditors, ” the source said, adding that none of the other creditors would complain.
Among others that have applied to intervene in the restructuring scheme were BOC Aviation Ltd, Macquarie Aircraft Leasing Services (Ireland) Ltd, Sky High I Leading Co Ltd and Kayan Group.
Another source said none of them have given any reasons nor disclosed what they were intervening for. “They could just be keeping their options open while they are still in discussions with AAX. They are unlikely to be hostile nor disruptive to the scheme. Only MAHB was explicit with what it wanted and that is why AAX gave in, ” the source said.
It is a prerequisite that the proposed debt restructuring scheme be completed and be successful before it can formalise any fund-raising exercise. AAX announced the debt restructuring plan on Oct 6, which proposed that its creditors take a 99% haircut from RM63.5bil to RM200mil to avoid liquidation. Current liabilities amount to RM2bil while the remaining are contingent liabilities.
The plan required approval from creditors holding 75% of the total debt. It is learnt that Airbus itself held roughly 75%. “Time is of the essence here and AAX is running out of money. It needs to get its creditors to vote on the scheme, get it done and dusted with and move on so that it can raise new money and revive the company, ” said the source.