AirAsia X accommodates Malaysia Airports

by PRIYA VASU / pic by BLOOMBERG

AIRASIA X Bhd (AAX) has submitted a revised restructuring scheme to seek the convening of a court sanctioned meeting for all creditors to vote on the terms of the restructuring.

In a filing to Bursa Malaysia yesterday, AAX noted that pursuant to its announcement of the scheme on Oct 6, 2020, Malaysia Airports (Sepang) Sdn Bhd (MASSB), objected to its classification as an unsecured creditor.

After consultation, AAX has accommodated MASSB and made certain clarifications and revised the scheme under two separate classes “A” and “B”.

“Class A shall consist of creditors who are considered critical or essential and who may have secured and/or other rights. Class B shall consist of creditors who do not fall within Class A,” noted AAX.

MASSB is now a Class A creditor. The airline further added that MASSB has further issued a writ demanding an immediate payment of RM78 million comprising largely of passenger service charges (PSCs) that were never collected from passengers.

AAX reiterated it will not meet this demand as the legality of the PSC scheme is the subject matter of pending litigation and a further court hearing is scheduled for March 24, 2021, and said the duplicity of legal actions is an abuse of the court process.

“This is and has always been a contentious matter between the parties, but now, the timing of the RM78 million claim appears opportunistic,” AAX said in a separate statement yesterday.

The company further added that by seeking immediate payment of the RM78 million, MASSB is impeding the restructuring process and AAX is concerned this appears to be an attempt to gain preferential treatment, and an unfair and unlawful advantage over all other creditors, including the thousands of passengers that are affected.

“Notwithstanding the above and in the interest of time, the disputed RM78 million has been included in full in Class A. The scheme will be in line with all other creditors and avoid any preferential treatment for MASSB,” it further said.

MASSB, through its lawyers, has also threatened to take civil and criminal breach of trust (CBT) actions against the directors of AAX in their personal capacity for the non-collection of the PSCs.

The board of AAX denied any element of CBT concerning the PSCs whatsoever, especially when the outstanding and contentious portion of the PSCs was never collected from the passengers.

“In addition to being frivolous and vexatious, this move is intimidatory in nature and at odds with MASSB’s stated intentions of finding an amicable solution moving forward,” said AAX.

AAX said major creditors have all demonstrated great maturity, professionalism, constructive engagement and commercial realism in dealing with the debt-restructuring exercise.

“Though the process is ongoing and a common consensus remains to be reached, AAX looks forward to being able to present the revised scheme for all creditors to vote on early in the first quarter of 2021,” said AAX.

AAX also urged MASSB, being possibly one of the largest beneficiaries of a revitalised AAX, to allow for the convening of a timely voting by all creditors to complete this restructuring process, so that AAX can take to the skies again and continue to provide an essential public service to all Malaysians.