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

(Corrects paragraph 12 reference to “prosecution” to say “affidavit” instead)

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

CEO Benyamin Ismail told Reuters in a telephone interview that negotiations and talks with lessors, aircraft maker Airbus SE and service providers had progressed, but declined to detail what had been agreed.

The airline, a subsidiary of AirAsia Group, 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 complete this as soon as possible. We’re talking to everyone, we’ll have more colors towards the end of the year, ”said Benyamin, declining to reveal details of potential investors, 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’re pretty confident that we’ll be successful. The main commercial conditions have already been ruled out, ”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 have 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 drafts of the blocking agreements and the termsheets were sent to the donors on May 18th. Donors are currently reviewing them, ”said AAX.

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, 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 here 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)