AirAsia X restructuring supported by lessors and investors

Wikimedia Commons, lasta29

The majority of AirAsia X (AAX) lessors have expressed support for the airline’s restructuring plan. In addition, a group of potential new investors showed interest to continue discussions with the Malaysian air carrier and its lessors regarding new terms and commercial arrangements related to the airline’s restructuring process and fundraising, as written in the emails seen by Reuters.

AAX reportedly received 10 letters from its supportive lessors, including Macquarie Aircraft Leasing Services and Aircastle as well as an unnamed public-listed financial group, expressing high interest to participate in the airline’s fundraising. The Irish lessor Macquarie will likely support the recapitalized airline under a new restructured lease agreement replenished with additional terms. Under additional conditions, the AAX may be asked to submit a detailed business plan and gain back up from its credible third-party investors.

The Malaysian air carrier counted that lessors who would continue to co-operate with the airline in its restructuration would be able to recover from 44% to 66% of lease rental loss under new restructured agreements.

However, some of the AAX lessors, such as BOC Aviation and others, have filed the affidavits in the High Court of Malaya at Kuala Lumpur to intervene with the proposed restructuring process, arguing that the airline is “hopelessly insolvent”. In December 2020, Airbus also filed a lawsuit in which the company warned that if the airline proceeded with the restructuring plan, the European planemaker would lose aircraft orders for more than $5 billion.

Meanwhile, a lawsuit of the Singapore-based lessor BOC Aviation against AirAsiaX regarding the airline’s debt of more than $23 million for outstanding liabilities for four non-specified aircraft lease agreements appears to be the largest recovery litigation case so far. The lessor won its lawsuit at UK’s court in November 2020 and took further steps to take the court decision into action by registering the foreign judgment in Malaya’s High Court on December 7, 2020.

AirAsia X seeks to restructure its total debt of 64.15 billion ringgit ($15.3 billion). In December 2020, the airline announced its plans to raise up to 200 million ringgit ($49.49 million) by issuing its shares to new investors after the debt restructuring. The airline’s restructuring plan needs approval from its creditors holding at least 75% of the total value of the debt.


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