(Bloomberg) -- AirAsia X Bhd. is liquidating its Indonesian arm in a bid to survive the virus pandemic that has left the low-cost airline’s planes grounded since late March.
The long-haul arm of AirAsia Group Bhd. has also written down its 49% stake in Thai AirAsia X, the airline’s deputy chairman Lim Kian Onn said in an interview with the Star newspaper.
These efforts come amid AirAsia X’s proposed restructuring plan to wipe out almost 63.5 billion ringgit ($15.3 billion) in debt and save it from collapse. The proposal requires approval from investors and creditors.
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Initial negotiations with creditors have been tough as they are understandably upset, Lim said in the interview. They had asked for better terms, including free equity for forgiven debt -- something that would be impossible for the airline to fulfill, he added.
Still, Lim said all of them genuinely wanted to find a common ground to take the airline forward. “No one has anything to gain from our demise,” he told the newspaper.
The airline is planning to resume flights in the first quarter, though the process remains “dynamic,” said Lim. Should the rescue plan get approval, the company will have to renegotiate every single contract and will do its best to look after all stakeholders’ interests, he said.
©2020 Bloomberg L.P.
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