SINGAPORE: AirAsia Group, which has had two straight quarterly losses, is asking to amend terms of a US$200mil (RM815mil) private credit loan from Ares Management Corp and Indies Capital Partners to secure some payments for aircraft lessors, according to people familiar with the matter.
The airline has requested that Ares and Indies allow it to share revenue from certain flight routes with plane-leasing firms also owed money, said the people who asked not to be identified because the information is private.
That revenue is currently pledged to the private credit lenders for the loan repayment.
By doing so, the lessors would get greater certainty over disbursements of revenues to them, said the people.
Both Ares and Indies would need to approve the request, and a deal may not be reached, they said.
AirAsia didn’t respond to requests for comment. Ares and Indies declined to comment.
AirAsia’s finances have been squeezed this year after the US-Iran conflict caused energy prices to surge, and a lack of fuel hedging by the carrier compounded the impact.
That forced the airline to ask some aircraft lessors to push back rental payments.
The Malaysian company is seeking to raise as much as US$1bil in international debt markets and RM700mil in local credit, separately.
The airline is seeking to consolidate its debt into a unified, lower-cost structure with extended maturities and better terms, the company said earlier this month.
AirAsia’s existing US$200mil private loan was part of a larger US$443mil dual-tranche financing in 2024, which was used for refurbishing planes grounded during the pandemic and to refinance lease liabilities. That funding was secured by the sale of future airline tickets from AirAsia’s key routes.
AirAsia has repaid the lion’s share of the US$243mil in lease liabilities that were part of that earlier borrowing structure, the people said. If the current AirAsia proposal is approved, the revamped debt facility would increase by some US$200mil after the repackaging of recently accumulated lease liabilities, the people said. — Bloomberg
