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Malaysia based AirAsia X Bhd is liquidating its Indonesian arm and says it has run out of money.
The long-haul arm of AirAsia Group Bhd has also written down its 49% stake in Thai AirAsia X.
Airline’s deputy chairman Lim Kian Onn said in an interview with “The Star” newspaper, “We have run out of money,”.. “Obviously, banks will not finance the company without shareholders, both old and new, putting in fresh equity. So, a prerequisite is fresh equity.”
According to Lim, that airline needs to raise up to 500 million ringgit (US$120 million) to restart the airline.
AirAsia X’s proposed restructuring plan to wipe out almost RM63.5 billion in debt to save it from collapse., but the proposal requires approval from investors and creditors.
AirAsia X, proposed that creditors holding unsecured debts of RM9.2bil to accept a 98% haircut. This means for every RM100 lent to AAX, the airline will repay only about RM2 – within five years at 2% interest.
AAX is also asking its suppliers to waive their claims on an additional sum of RM54.3bil.
AirAsia founder Tony Fernandes, who spoke to the media on Oct 8, agrees that “no one wants a haircut”…“However, reality bites”
“We are in unprecedented times. Should the airline wind up and you get 30 planes, what are you going to do with them?”
“There’s no demand for them right now…or, we can all put our heads together and try to save the situation, ” he says.