Home Business meeting As creditors talks progress, Malaysian group AirAsia X plans end of October

As creditors talks progress, Malaysian group AirAsia X plans end of October

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FILE PHOTO: Tail of AirAsia X aircraft seen at Garuda AeroAsia maintenance facility in Tangerang, Indonesia September 20, 2017. REUTERS / Beawiharta / File Photo

KUALA LUMPUR, Sept. 17 (Reuters) – Malaysian company AirAsia X Bhd (AAX) (AIRX.KL) has made “substantial progress” in months-long discussions with its creditors to call meetings with them to vote on a restructuring plan by the end of October, its chief executive said.

CEO Benyamin Ismail told Reuters in a telephone interview that negotiations and talks with donors, aircraft manufacturer Airbus SE (AIR.PA) and service providers had progressed, but declined to detail what had been agreed.

The airline, a subsidiary of AirAsia Group (AIRA.KL), has also spoken to potential investors for its recapitalization and hopes to complete talks by the end of the year.

“We plan to raise funds in December and finish this as soon as possible. We are talking to everyone, we will have more colors towards the end of the year,” Benyamin said, declining to reveal investor details. potential but adding that there were more than a handful.

Benyamin said talks with creditors are in the final stages and all have indicated that they want the airline to restructure.

“We are confident enough to achieve this. The main trading conditions are already on the sidelines,” he said, referring to negotiations with donors. There has been no objection to a proposal to put engine maker Rolls-Royce Group in the same classification as most other creditors, he added.

In a court document filed on Monday, the AAX said negotiations were still ongoing but “various letters of commitment had been obtained” from creditors.

Many donors have already made other deals with airlines in Southeast Asia to resume planes earlier or reduce fares, at least temporarily, to help them survive the drop in air travel caused by the coronavirus pandemic.

“The draft foreclosure agreements and condition sheets were sent to donors on May 18. Donors are currently reviewing them,” AAX said.

The airline told the court it received signed letters of commitment from three major creditors to support and vote for the program, namely Honeywell International, Bridgestone Aircraft Tire Company and Sky High I Leasing Company.

AAX proposed last October to restructure 64.15 billion ringgit ($ 15.43 billion) in debt, a plan that has sparked objections from more than a dozen creditors, many of whom are lessors.

Airbus (AIR.PA), the airline’s largest creditor, filed an affidavit in December saying it stands to lose more than $ 5 billion in orders if the project is successful. He declined to comment on the restructuring process.

This week, the court granted AAX an extension to hold its creditors meetings by March of next year, when a restraining order preventing creditors from bringing new lawsuits against the airline also expires.

($ 1 = 4.1570 ringgit)

(This story corrected the paragraph 12 reference to “prosecution” to say “affidavit” instead)

Reporting by Liz Lee; Editing by Lincoln Feast.

Our Standards: Thomson Reuters Trust Principles.

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