Malaysian budget airline AirAsia X gets court approval to convene creditor meetings

REUTERS/Lai Seng Sin

Malaysia’s long-haul budget airline AirAsia X Bhd has obtained court approval to convene creditor meetings, The Edge Financial Daily reported on Friday.

The newspaper reported that the High Court has separated the airline’s 14 creditors into three classifications — the first for airport operator Malaysia Airports Holdings Bhd, the second for other creditors, and the third for planemaker Airbus SE.

The airline did not immediately respond to a query seeking confirmation of the court decision.

AAX, an affiliate of AirAsia Group, has posted losses since June 2019 and is proposing to restructure 64.15 billion ringgit of debt.

The airline said the alternative was liquidation with no returns to creditors. It has been seeking for months, court approval to meet with creditors and vote on the proposal.

A source with direct knowledge of the matter said the court decision allowed the airline a step forward in its proposed restructuring, and assuages liquidation concerns for now.

“With this ruling, liquidation is not an immediate concern,” said the source, who declined to be named because of the sensitivity of the issue.

The airline has faced objections to its restructuring from some of its creditors. Lessor BOC Aviation Ltd and Malaysia Airports have argued that AAX is “hopelessly insolvent”, and asked the court to dismiss AAX’s proposal.

However, court documents filed last month also showed that most of AAX’s lessors support a restructuring plan and wanted to continue talks with the airline. AAX also said it has received interest from potential investors for fundraising after its reorganization.

Domestic rival Malaysia Airlines, also pursuing a restructuring, held a meeting with aircraft lessors last week.

The meeting outcome would be reported to British courts for a sanction hearing on Feb. 22 and the national carrier expects the court process and restructuring to conclude by the end of March.

Both airlines will need approval from creditors at the meetings holding at least 75% of the money owed.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.