AirAsia' Group announced its long haul arm AirAsia X received a near unanimous approval for its debt restructuring plan.
Following recently held Scheme of Arrangement (SOA) meetings on November 12, the airline reported 99% of creditors from three classes voted in favor of the plan. In a statement from the airline, Class A and Class C creditors voted 100%. The only class that did not get a 100% vote in favor was Class B with a 97.6% vote in favor.
With the approval, the airline stated it will present the vote results to its court sanction in the coming weeks for the court approval of the plan. Once approved, AirAsia X will proceed with its recapitalization plan that was approved by shareholders in June 2021. The completion of the plan is expected in the first quarter of 2022.
“AAX wishes to thank all its creditors for their strong support for its future at these very difficult times. When the scheme was initially announced in October 2021, it was comprehensively rejected and widely derided as being wholly inadequate and unreasonable. However, through a process of many transparent discussions on our business plan and alignment of common business interests, all major creditors have agreed that the combined interests of the various groups of stakeholders are best served by allowing the airline to proceed with the scheme intact and without substantial changes to what was initially presented,” AirAsia X said in a statement.
AirAsia X's restructuring plan would deal with the airline's reported liabilities worth around RM 33.65 billion (~USD $8.1 billion). Under the plan, the airline will replay just 0.5% of its debts to creditors and terminate contracts with suppliers.
The airline expects to raise as much as USD $150 million in fresh equity through a rights offering and secondary sale by the first quarter of 2022.
Pror to the COVID-19 pandemic, AirAsia X operated medium/long-haul flights on mostly international routes. Due to travel restrictions, much of its operations has been grounded since March 2020. At present AirAsia X reports it is operating with four widebody Airbus A330 aircraft for regional cargo flights, with two more planes to become operational by the year's end.