According to the aircraft production company, Airbus SE revealed that they will incur a loss of more than $ 5 billion in aircraft orders if AirAsia X Bhd (AAX) debt restructuring scheme is carried out.
It was driven by AAX's actions in defending its scheme from allegations by major lender BOC Aviation Limited (Boca) that it was in favor of Airbus and did not have a debt-equity exchange offer for creditors.
Based on the December 16 affidavit filed in the Kuala Lumpur High Court, Asia Pacific Regional Chief Anand Emmanuel Stanley stated that there was a high probability that Airbus would incur losses and terminate the purchase agreement.
He added that AAX has placed aircraft orders with the company. In addition, Airbus is rumored to have built 7 A330neo aircraft which are currently in inventory and there are even 71 more orders that could affect Airbus' profits if canceled.
In addition, AAX is alleged to owe Airbus RM48.71 billion including down payment for the purchase of 118 aircraft.
Boca, meanwhile, says that AAX debt calculations do not include future debt and only assign debt to Airbus which holds about 75% of the total debt value required for the restructuring process.
However, AAX senior lawyer Shereen Ee denied the calculation and considered it unfair as compensation for Boca expired until the end of her lease term.
Regarding the conversion of debt to equity proposed by Boca, it is alleged to be contrary to the objective of restructuring AAX which aims to raise new funds and continue to survive. In addition, any party will have an equity stake in AAX if they inject new funds into the company.
For all you know, Boca became one of Norwegian Air’s major shareholders in May after the lessee agreed to convert the debt into equity.
However, the airline allegedly failed to get more national support last month and asked for protection due to being on the verge of collapse. But they managed to get shareholders' votes last week for plans to save the company.
While the AAX lawsuit states that Boca is the company's largest taxpayer and they will continue to provide cooperation to all creditors.
However, Airbus and Boca declined to comment further as legal proceedings and discussions are underway.
AAX, the long-term unit of AirAsia Group's budget carrier, has total debt and liabilities of around RM64.15 billion. Previously, they had proposed to convert their debt into a principal amount of RM200 million. Recording losses since June 2019, AAX is now seeking court approval to hold a meeting with creditors for the restructuring process.
