KUALA LUMPUR (Reuters) – Malaysia’s AirAsia X Bhd
, the long-haul arm of AirAsia Group Bhd
, said it wanted to restructure $15.3 billion of debt and slash its share capital by 90% to continue as a going concern.
Hard hit by the coronavirus pandemic as closed borders have grounded most of its planes, the budget airline said it had severe liquidity constraints and, with no return to normalcy in sight, added, “Imminent default of contractual commitments will precipitate a potential liquidation.”
Its statement late on Tuesday came just days after Malaysia Airlines, the other major carrier, said it was very low on cash and had reached out to lessors, creditors and suppliers for urgent restructuring.
AirAsia X is seeking to reconstitute 63.5 billion ringgit ($15.3 billion) of debt into a principal amount of 200 million ringgit and waiver of the rest.
That debt restructuring as well as a revamp of its business model would be needed to raise fresh equity and debt, which in turn would be required to restart the airline, it said.
The statement did not break down the liabilities or name the airline’s creditors.
AirAsia X declined to respond to a Reuters’ query regarding its debt.
The hefty debt could include aircraft orders, potentially spelling cancellations, said an aviation analyst who declined to be identified as he no longer covers the company.
“A lot of that may be aircraft orders,” he said. “The real haircut may not be that huge if it’s purely on actual debt and lease commitments.”
AirAsia X finalised orders with Airbus SE
for 78 A330neo and 30 A321XLR planes last year, but said in February it would defer delivery of the A330neo planes and consider other changes to trim its fleet.
The airline is Airbus’ biggest customer for the A330neo.