KUALA LUMPUR (REUTERS) - Long-haul, low-cost carrier AirAsia X Bhd has run out of money and needs to raise up to RM500 million (S$163.5 million) to restart the airline, deputy chairman Lim Kian Onn said in a newspaper interview published on Saturday (Oct 17).
The Malaysian airline, the long-haul arm of AirAsia Group Bhd, said this month it wanted to restructure RM63.5 billion of debt and slash its share capital by 90 per cent to continue as a going concern.
"We have run out of money," Mr Lim told The Star newspaper." Obviously, banks will not finance the company without shareholders, both old and new, putting in fresh equity. So, a prerequisite is fresh equity."
He said the airline had actual liabilities of RM2 billion, with the larger figure of RM63.5 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 RM300 million in new equity, then the shareholder funds are RM300 million at the restart of business and if we are able to borrow RM200 million, we feel that we will have a good platform to start all over again," he told The Star.
Mr 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, Mr Lim told the newspaper.
Rival Malaysia Airlines is also in financial trouble, but he said there would be "no good outcome" from seeking to merge two airlines in dire straits.
AirAsia X declined to comment beyond the details published in the newspaper article.