KUALA LUMPUR (Nov 8): AirAsia X Bhd (AAX), the low-cost long-haul affiliate of AirAsia Group Bhd, rose amid active trade ahead of its creditors' meeting.

At 4.22pm on Monday (Nov 8), the counter had risen one sen or 22.22% to an intraday high of 5.5 sen.

The counter was among the most actively traded stocks, with 54.45 million shares traded, exceeding its 200-day trading average of 30.11 million.

It was reported by theedgemarkets.com last month that AAX will hold a meeting with scheme creditors on Nov 12 to vote on its proposed plan to restructure RM63.5 billion of debt.

In its explanatory statement and notice of the court-convened meetings to scheme creditors dated Oct 18 seen by theedgemarkets.com, the carrier is expected to hold separate meetings for the three classes of creditors — comprising creditors that have securities over the assets of AAX, including airport operator Malaysia Airports Holdings Bhd and financial institutions (Class A), creditors that have unsecured claims against AAX, including engine suppliers and aircraft lessors (Class B), and aircraft manufacturer Airbus Group (Class C) — on the same day.

The proposed debt restructuring requires the approval of at least 75% of the total debt value that votes in each class of creditors. Failure to get creditors’ approval for its business restructuring will likely see the carrier becoming insolvent and result in material losses to its stakeholders.

It was also reported that the Kuala Lumpur High Court recently gave AAX until March 17 next year to hold a meeting of creditors to consider the proposed debt restructuring.

Under its debt restructuring plan, the carrier is aiming to reconstitute RM63.5 billion of its debt into an acknowledgement of indebtedness for a principal amount of up to RM200 million by shaving off 99.9% of its issued share capital as well as a proposed share consolidation of every 10 existing shares in AAX into one share.

It is also proposing a renounceable rights issue of new shares to raise gross proceeds of up to RM300 million from its existing shareholders, as well as a proposed issuance and allotment of new AAX shares to raise another RM200 million.

Last month, AAX said in a bourse filing it had been classified as a Practice Note 17 (PN17) company after its external auditor Messrs Ernst & Young PLT (EY) expressed a disclaimer of opinion on its audited financial statements for the 18-month financial period ended June 30, 2021.

The news caused AAX's share price to slump two sen or 20% to eight sen on Nov 1.

According to the carrier, it has 12 months to regularise its financial condition, failing which it will be delisted from Bursa Malaysia.

"The company is taking the necessary steps to address its PN17 status," AAX said, noting that it is currently undertaking a proposed debt and corporate restructuring, as well as a proposed fundraising.

Year to date, AAX had fallen 31.25%.