Malaysia's AirAsia X proposes paying 0.5% of US$8.1b debt owed to creditors - document

AirAsia X is proposing to pay just 0.5% of debt owed to each of its creditors and to terminate all existing contracts so that it can restructure 33.65b ringgit (US$8.1b) of liabilities, a document shows. The Malaysian low-cost long-haul airline, a sister carrier to AirAsia Group, on Monday told the stock exchange it had set a date of Nov. 12 for creditor meetings to vote on the restructuring proposal. "To avoid a liquidation and to allow the airline to fly again, the only option is for AAX to undertake the proposed debt restructuring," the airline said in a 127-page explanatory statement for the meeting that is being sent to creditors. Half of the total liability is the cost of terminating airplane orders from its largest creditor Airbusfor 78 A330neo widebodies and 30 A321neo narrowbodies, the document said. AAX also proposed that if it were to garner more than 300m ringgit (US$72m) 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.<br/>