Airline battles to survive pandemic crisis with restructuring, revised business model as share prices plunge KUALA LUMPUR: Malaysian budget airline AirAsia X (AAX), the long-haul arm of AirAsia Group, said it has proposed restructuring $15.3 billion of debt and reducing its share capital by 90 to continue as a going concern. AAX said it has severe liquidity constraints, and with a return to normalcy unlikely, “imminent default of contractual commitments will precipitate a potential liquidation.” Group-wide debt restructuring and renegotiation of financial obligations, as well as updating its business model, are prerequisites to raising fresh equity and debt, which will be required to restart the airline, it said late on Tuesday. In early Wednesday trade, AAX’s share price fell 10 percent to 4.5 Malaysian sen. The group, hard hit by the COVID-19 pandemic, is seeking to reconstitute 63.5 billion Malaysian ringgit ($15.30 billion) of debt into a principal amount of 200 million Malaysian ringgit and for the balance to be waived. AAX also proposed reducing issued share capital by 90 percent and consolidating every 10 existing ordinary shares into one share. AAX’s announcement comes days after Malaysia Airlines said it had reached out to lessors, creditors and suppliers for urgent restructuring due to the pandemic. The national carrier’s holding firm Malaysia Aviation Group told lessors it will likely be unable to make payments owed after November unless it receives more money from state fund Khazanah Nasional Bhd, Reuters reported on Friday. “AAX’s creditors could potentially come to an agreement on the terms, but they would have to be content with recovering a minute fraction of their capital,” MIDF Research said on Wednesday. The airline said unaudited records on June 30 showed it had a shareholder equity deficit of 960 million Malaysian ringgit. Liabilities of 3.38 billion Malaysian ringgit exceeded assets of 1.39 billion Malaysian ringgit. It has appointed board member Lim Kian Onn, a chartered accountant and former banker, as deputy chairman to lead the restructuring. AAX said its revised business plan involves overhauling its route network, fleet size, cost base and workforce to become a leaner and more sustainable business.