Long-haul low-cost carrier AirAsia X has run out of money and needs to raise up to MYR 500 million (USD 120.60 million) to restart the airline. This was revealed by deputy chairman of the company Lim Kian Onn.
The Malaysian airline, the long-haul arm of AirAsia Group said this month it wanted to restructure MYR 63.5 billion (USD 15.32 billion) of debt and slash its share capital by 90% to continue as a going concern.
“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,” Lim said. He added the airline had actual liabilities of MYR 2 billion (USD 0.48 billion), with the larger figure of MYR 63.5 billion (USD 15.31 billion) including all lease payments for the next eight to 10 years and its large order for Airbus SE planes and contracted engine maintenance with Rolls-Royce Holdings.
“If we find MYR 300 million (USD 72.32 million) in new equity, then the shareholder funds are MYR 300 million (USD 72.32 million) at the restart of business and if we are able to borrow MYR 200 million (USD 48.21 million), we feel that we will have a good platform to start all over again,” he told The Star newspaper. Lim said AirAsia X also needed to convince its lessors of its business plan, adding an unnamed lessor recently took back one of the airline’s planes to convert it to a freighter.
The airline plans to liquidate its small Indonesia-based carrier and has completely written down its stake in Thai AirAsia X in its books, with the Thai carrier not part of the restructuring scheme, Lim told the newspaper.
Rival Malaysia Airlines is also in financial trouble, but Lim said there would be no good outcome from seeking to merge two airlines in dire straits.