Budget long haul carrier AirAsia X will undergo a major debt restructuring to stave off liquidation.
It proposed to restructure a huge $15.3 billion of debt and reduce share capital by 90% to stay in business.
The airline has arguably been hit hardest of all AirAsia units as it operates only cross-border flights and the continued border closures have left it close to ‘imminent default.’
As well as a debt restructuring it plans to revamp its business model in order to raise fresh equity.
"To avoid a liquidation and to allow the airline to fly again, the only option is for AirAsia X to undertake a group-wide debt and corporate restructuring and update its business model to survive and thrive in the long term," AirAsia X said.
Under the proposal, AirAsia X wants approval to consolidate every 10 AirAsia X shares into one.
AirAsia shares fell 10% on the news.
AirAsia X has firm orders for more than 100 Airbus jets but stated earlier this year it would defer deliveries.
The airline has appointed former banker Lim Kian Onn as deputy chairman to spearhead its restructuring which will see adjustments to its route network, aircraft fleet and staff levels.
AirAsia Japan this week announced it was ceasing operations, and it could also exit AirAsia India with a potential buyout likely from joint venture partner Tata Sons.
Written by Ray Montgomery, Asia Editor
