By Liz Lee and Jamie Freed
KUALA LUMPUR - AirAsia X (AAX) creditors have agreed to a restructuring that will pay just 0.5% of debt owed and end its existing contracts, the Malaysian long-haul low-cost airline said on Friday.
AAX said the first of three groups of creditors had voted 100% in favour of the plan to restructure 33.65 billion ringgit ($8.1 billion) of liabilities and the second had voted 97.6% in favour.
The final group, which includes planemaker Airbus, has also voted 100% in favour of the plan, it added. AAX needed 75% of each of the three classes of creditors to approve the plan for it to proceed.
Shares in AAX rose as much as 33% to their highest since Nov. 1 after the announcement.
AAX said the results will be presented for court approval in the coming weeks after which it will start a recapitalisation, expected to be completed in the first quarter of 2022.
The airline said its cost base will be significantly below that of regional competitors after the restructuring.
Last month, the airline warned of liquidation if creditors did not agree to the plan, which will be followed by a 500 million ringgit equity raising.
It is one of many carriers in the Asia-Pacific region to have entered a court-overseen debt restructuring to survive the pandemic. Others include Malaysia Airlines, Virgin Australia, Thai Airways and Philippine Airlines.
The first class of AAX creditors includes airports, financial institutions and maintenance providers, a 127-page explanatory statement for the creditors meeting seen by Reuters shows.
The second class includes engine suppliers, lessors, trade creditors, travel agents and passengers, the document said.
Half of the airline's total liability is the cost of terminating airplane orders from Airbus for 78 A330neo widebodies and 30 A321neo narrowbodies, the document said. A person familiar with the matter said AAX had decided to reduce its orders to 15 A330neos and 20 A321XLRs.
Airbus did not respond immediately to a request for comment.
AAX also said it is in negotiations with lessors of 29 planes and certain other creditors on commercial terms for continued or future business relationships.
The 0.5% of debt owed to each creditor will be paid from operating cash flow one year after the restructuring goes into effect, the airline said in the document.
AAX also proposed that if it were to garner more than 300 million ringgit in annual earnings before interest, tax, depreciation and amortisation, lease rentals and restructuring costs during its 2023-2026 financial years, all creditors except Airbus would be entitled to 20% of those earnings.
