(Bloomberg) -- Some bondholders of Hong Kong Airlines are seeking to block a $6.2 billion debt restructuring plan, which they say treats them unfavorably compared with the company’s owner and its affiliates. 

The ad-hoc group, representing some holders of perpetual notes and advised by law firm Allen & Overy, will vote down a proposal to reduce the debt of the embattled carrier by 74%, according to court documents.

Hong Kong Airlines began a debt restructuring process in Hong Kong earlier this month. It opened a parallel procedure in the UK on Tuesday to deal with its unsecured creditors, including some lenders, lessors of aircraft and $683 million of bondholders. As part of the restructuring plan, unsecured creditors would get paid in cash an amount equivalent to about 5% of the money owed to them. 

Hong Kong Airlines Seeks to Restructure $6.2 Billion of Debt

The group’s lawyers told judge Timothy Fancourt on Tuesday that it can prevent the company from reaching the required 75% support to go ahead with the deal. 

The group said it expects Hong Kong Airlines to then apply for a so-called cross-class cram down, which would effectively allow it to proceed despite their opposition. The bondholders say that the carrier wouldn’t meet the criteria to apply for such a process because of “unfair” favorable treatment given to the firm’s owner and its affiliates. 

Creditors will vote on the restructuring plan ahead of a sanction hearing scheduled in December. The bondholder group is also opposing the company’s proposal to bundle the vote of secured and unsecured creditors together. 

Debt-ridden Hong Kong Airlines is currently the smallest of three carriers operating in the Asian hub. The company’s financial crisis predates the pandemic which curbed international travel worldwide. 

The carrier has managed to continue operating thanks to strong air cargo revenue. It’s now seeking to cut its aircraft fleet by almost two-thirds, with HNA’s Aviation unit and unnamed joint-venture partners planning to inject HK$3 billion ($382 million).

Separately, one of the company’s unsecured creditors has filed a wind-up petition in a Hong Kong court. The petition has been postponed several times. 

--With assistance from Danny Lee and Alice Huang.

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