AirAsia X proposes paying creditors just 0.5% of US$8b owed
Kuala Lumpur
AIRASIA Group's long-haul arm has offered to pay creditors just 0.5 per cent of the more than US$8 billion total debt they are owed, and to terminate all existing contracts as it tries to restructure, a document seen by Bloomberg showed.
The carrier, AirAsia X, told creditors it is unable to meet immediate debt and other financial commitments based on its financial position and industry outlook. The low-cost airline has barely flown in 19 months, since the early days of the Covid-19 pandemic.
Half of the RM36.6 billion (S$11.8 billion) liability is the cost of terminating orders with Airbus, its largest creditor, for 78 A330neo and 30 A321neo aircraft, said the document.
"To avoid a liquidation and to allow the airline to fly again, the only option is for AAX to undertake the proposed debt restructuring, proposed corporate restructuring and proposed fund raising and update its business model to survive and thrive in the long term," the airline said.
An Airbus spokesperson declined to comment, citing the ongoing debt restructuring process. An AirAsia X representative declined to comment. AirAsia X has set Nov 12 for creditor meetings to vote on the restructuring proposal, according to an exchange filing.
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Reuters first reported on the proposed payment plan earlier on Oct 18. The carrier posted a record quarterly net loss of RM24.6 billion in the three months ended June, mainly on provisions for the amount payable to creditors. Its shares fell 5 per cent to 9.5 sen at the close. BLOOMBERG
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