Lessors to vote on Malaysia Airlines restructuring | News | Airfinance Journal

Lessors to vote on Malaysia Airlines restructuring

Operating lessors to Malaysia Airlines will vote on 10 February whether to collectively accept the national carrier’s proposed restructuring terms, the carrier confirms.

This week’s vote applies to operating lessors only; other classes of creditors, including aircraft manufacturers and finance lessors, will vote separately.

In each class of creditors there must be agreement from creditors holding at least 75% of the monies owed to proceed with the restructuring.

There are seven classes of creditors in total, to which Malaysia Airlines owes approximately $4 billion.

The airline previously said that it hoped to conclude its restructuring as early as next month.

In January, Malaysia Airlines noted progress in convincing creditors to accept a restructuring in UK courts under Part 26 of the Companies Act 2006, which potentially allows distressed airlines to restructure leases and hand back aircraft.

MAG said it had received “overwhelming support to carry out its restructuring after many rounds of intense negotiations”.

Nevertheless, not everyone is agreeing to the Malaysian flag carrier’s requests to shave up to 75% off its lease bills, which prompted the airline’s parent MAG to suggest a scheme of arrangement proposed under its aircraft leasing subsidiary, MAB Leasing.

The outcome of this week’s creditor meeting will be reported back to the UK courts at a sanction hearing set for 22 February, the carrier confirms to Airfinance Journal

According to a letter sent to the leasing community, MAG owner Khazanah Nasional said it was ready to inject another $1 billion into MAG if lessors agreed to deal restructurings. Malaysia’s Ministry of Finance has ruled out any direct support to the flag carrier, leaving the final funding decision up to Khazanah.

Mainline Malaysia Airlines leases 75 aircraft: six Airbus A350-900s, 21 A330-300 and -200 variants, and 48 Boeing 737-800s. Air Lease (ALC) has by far the largest exposure to MAB in terms of asset values, followed by NBB Leasing, Standard Chartered, Aercap and Goshawk.

Transaction SnapshotMalaysia Airlines | Operating lease | 06-15 | 6xA350-900

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