AirAsia X shares jump as investors back restructuring

Shares in AirAsia’s long-haul unit jumped after the Malaysian airline said its investors had approved a restructuring plan that could pave the way for it to resume commercial operations when international borders reopen. AirAsia X’s stock closed 6.7% higher in Kuala Lumpur on Wednesday, a day after the airline said shareholders had approved resolutions regarding the restructuring with a margin of at least 99.8 per cent. The carrier called the development “a major milestone in the corporate restructuring process”. Saddled with RM63.5b ($15.4b) of debt, AirAsia X in October unveiled the restructuring plan as a last-ditch attempt to save its business and to cope with “severe liquidity constraints”. However, the plan could still hit turbulence with the company’s creditors. Like airlines around the world, AirAsia X and its parent have been pummelled by the closure of borders and restrictions on travel imposed due to Covid-19. AirAsia X’s deputy chair Lim Kian Onn said in October that the airline had run out of money and was liquidating its Indonesia business as well as writing down its 49% stake in Thai AirAsia X.  In the same month, the carrier warned of “an imminent default of contractual commitments [that] will precipitate a potential liquidation of the airline” barring restructuring. Proposals authorised by shareholders on Tuesday include shrinking AirAsia X’s issued share capital by 99.9%; a rights issue of up to RM300m, and an issuance of new shares of up to RM200m via a special purpose vehicle.<br/>