Shares in AirAsia’s long-haul carrier sink on restructuring plan

Shares in AirAsia’s long-haul unit skidded after the Malaysian carrier launched a last-ditch plan to save the business, blaming “severe liquidity constraints” caused by the coronavirus pandemic. AirAsia X’s Kuala Lumpur-traded stock fell 10% Wednesday a day after the company warned of “an imminent default of contractual commitments [that] will precipitate a potential liquidation of the airline”. The proposed restructuring comes as the future of AirAsia, owned by Malaysian tycoon Tony Fernandes, hangs in the balance. “A major debt restructuring and a renegotiation of its financial obligations are prerequisites for any raising of fresh equity which will be required to restart the airline,” AirAsia X said late on Tuesday. The plan, which requires the approval of shareholders, creditors and Malaysia's high court, involves reorganising AirAsia X’s RM63.5b ($15.3b) in debt to a principal amount of RM200m and waiving the rest, according to an exchange filing. It also proposes reducing the unit's issued share capital by 90% and consolidating every 10 existing ordinary AirAsia X shares into one. The carrier also will overhaul its workforce, aircraft fleet and route network to slash costs. AirAsia X said there were “varying degrees of support” for the scheme among its large creditors, all of which have “expressed strong support for a continuation of the airline business”. <br/>