Three people close to the process told Cirium that after months of negotiations, Malaysia Airlines had reached a unanimous agreement with shareholders and other creditors for the restructuring.
One of them said, "This is a pre-approved plan that has been fully approved as a result of ongoing discussions with tenants and lenders, and it is a process that is properly managed, fair and transparent. "
The three sources, all of whom have been in contact with the airline and have asked not to be named due to the sensitivity of the negotiations, have yet to confirm from the airline or its advisers that the British court, which filled out the relevant documents, was involved. The plan did not go ahead as planned on January 13, although they all said they had been notified in advance of the plan.
Another source said the airline had informed its company it would hold a court hearing about a week after the formal filing.
Reuters reported on Jan. 7 that Malaysia Airlines Group (MAG) said it was nearing the end of the restructuring process and hoped to complete it in the first quarter of this year. Noting that it is in talks with about 40 creditors and creditors to reduce under its debt settlement plan of 16 billion VND ($ 4 billion), he expressed confidence that a "win-win" outcome could be achieved. Decided.
Cirium understands that the airline does not yet have unanimous support and still needs the approval of at least one of the remaining parties seeking the approval of investors who fund passenger aircraft to the airline. Malaysia.
A total of 16 aircraft were affected by Malaysia Airlines, a total of 60 aircraft.
Sources said Malaysia Airlines did not require all leases and creditors to agree on a court-controlled restructuring to operate, and the level of creditors who had expressed their consent would be sufficient to determine the change. Ball.
"They don't need us, but they still want you on the boat," said one survivor.
From ACRIMONY to the set
The current level of acceptance is in stark contrast to the attitude of creditors when the airline requests a restructuring.
Reuters reported that in October 2008, the tenants, who claimed to represent 70% of the aircraft and engines leased to the group, called the airline's restructuring plan "a serious drawback." Determined to compete.
This strong start is partly due to the airline's proposal to be placed under Section 26A of the 2006 British Companies Act.
This requires the consent of a single class of creditors rather than all creditors, and non-compliant creditors can be forced to make agreements through destructive mechanisms. Airlines are also asking for deductions for leases that many tenants find unacceptable.
After a negative response to the plan, the airline hired U.S. structural expert Houlihan Lokey to assist. Sources told Cirium that negotiations went smoothly after the company's involvement.
People close to the process, who do not work for Houlihan Lokey, said the company could get a "pull" from creditors after the appointment. This goes hand in hand with “achieving in a financial and financial leasing community where you can no longer continue to threaten to ruin everyone because [if you do] there will be no industry left to help you. Lease to reach an agreement with the airline.
An airline-related source said the previous proposal was "less favorable" for both lenders and lenders, but in the latest update it was "more creditor-friendly plans".
Another source said that while the airline and its advisers may not necessarily agree with the tenant's view of the Section 26A proposal, it could not continue the level of hostility from its creditors.
They then engaged in some negotiations and raised wages to a reasonable level. Based on that principle, the people [creditors and minor creditors] ultimately accept the fact that restructuring must take place, ”he said, adding that the current closer agreement includes conditions. Which favors the landlord as well as avoids the maintenance costs that have arisen in the restructuring of several other Covid-19 airlines.
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