by Ganesh Sahathevan
Reuters has reported that AirAsia X's proposed restructuring, which has been submitted for court approval, is being objected to by BOC Aviation.
Quite apart from the grounds for objection court approval can have the effect of validated a series of transactions between AAX and Airbus which Airbus has admitted, before a UK court, were tainted by corruption and in breach of the UK's Bribery Act 2010.
Sunday, October 18, 2020
AAX best put into receivership, Tony Fernandes & co removed as managers : UK corruption finding means Airbus STILL cannot continue dealing with AirAsia and AirAsiaX management led by Tony "Tajuddin" Fernandes ; creditors haircut and shrinking equity will be an exercise in futility
by Ganesh Sahathevan
Flightglobal has reported:
AirAsia X has asked creditors to accept an epic debt haircut, offering two painful options amid an airline industry in crisis.
Announced on 6 October, the plan, if approved, would see liabilities of some MYR63.5 billion ($15.3 billion) reduced to just MYR200 million payable within the next five years at a 2% interest rate.
Shareholders are also being asked to share the pain, with the carrier proposing to reduce share capital by 90%.
Anyone even vaguely familiar with Malaysian corporate practises will be aware that these types of exercises have achieved little if at all, and are invariably intended to ensure existing management and controlling shareholders remain in charge of the ruined business.
In the case of Air Asia X and Air Asia, there is the additional problem of the UK corruption decision which prevents Airbus, AA and AAX's provider of airplanes, spares parts and related services, from dealing with its current management lead by Tony Fernandes and Mehrahnun Kamaruddin (see story below).
The restructuring proposed by Fernandes and company is not in the interest of creditors. It is best the company be put into receivership, and Tony Fernandes and associates be removed as managers.
To Be Read With
Wednesday, February 5, 2020
Airbus cannot continue dealing with AirAsia and AirAsiaX, regardless of what MACC and other Malaysian authorities decide : $ 4 Billion fine means business cannot be conducted with current management and board; AA & AAX management board must be purged, given AA &AAX Airbus fleet
Airbus has estimated that the damage from its bribery conviction is likely to be in the region of USD 220 Billion.The record setting USD 4 Billion fine is only the start (see story below).
In Malaysia on the other had there is still the sense that Airbus admission needs to be "investigated" and "proven". MIDF Research has gone as far as to speak of a "golden opportunity for both co-founders to strengthen their trustworthiness back in the company and subsequently, the airline industry".
Malaysian authorities, investment houses and various persons in the ruling elite seem unable to comprehend that regardless of what they conclude about AirAsia and AirAsiaX, Airbus will be severely constrained in how it deals with AA and AAX. Dealing with current management and directors as if nothing happened would be contrary to the admission of guilt, and the penalty.
These matters cannot but concern AA and AAX management and boards for both airlines have Airbus fleets.Short of swapping their planes for Boeings or China made C919s, the only logical step is for AA's and AAX's management and board to be purged and replaced with fresh faces who can be proven to be independent of the current structures.
External administrators need to be appointed and the companies restructured.
END
Airbus put potential damage from bribery conviction at €200bn
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