Operating lessors with exposure to Malaysia Airlines will vote on the carrier’s restructuring plan on 10 February, the airline confirms to Cirium.
The Malaysian airline adds that it has divided creditors into seven classes as part of its UK court-led restructuring, which involves a “revised long-term business plan”.
Finance lessors are in a separate class and will not participate in Wednesday’s vote.
Cirium fleets data show 16 lessors have exposure to Malaysia Airlines to the tune of 60 aircraft.
Lessors with exposure to Malaysia Airlines
|Lessor as manager||Aircraft type||Number of aircraft|
|Source: Cirium fleets data|
|Air Lease Corporation||A350-900||6|
|ALAFCO Aviation Lease & Finance||737-800||2|
|Aviation Capital Group||737-800||1|
|BOT Lease (owned by KOTAM)||737-800||2|
|Jackson Square Aviation||737-800 and A330-300||1 and 2|
|SMBC Aviation Capital||737-800||2|
|Standard Chartered Aviation Finance||737-800 and A330-300||4 and 2|
Negotiations with lessors got off to a rocky start when most objected in October to the proposed restructuring, pointing in particular to a cramdown mechanism available under Part 26A of the UK Companies Act as being unfair. Under that mechanism, approval from only one class of creditors would have been required and dissenting creditors could have been forced into agreement.
However, with the appointment of restructuring specialists Houlihan Lokey and after months of what the airline’s parent Malaysia Aviation Group says were “intense” negotiations, the airline and its advisors were able to mollify lessors and convince nearly all of them to agree in principle to a restructuring.
Since a “small minority” did not indicate its support, the airline decided to implement part of the restructuring through a scheme of arrangement to be proposed by its aircraft leasing subsidiary MAB Leasing.
MAB Leasing issued a practice statement letter on 23 December to some of its creditors to notify them of its intention to file a scheme of arrangement in the UK court.
On 20 January, a UK court green lit the airline to convene a creditors meeting to approve the proposed scheme.
Malaysia Airlines expects to report back the outcome of the creditor meeting to the UK court at a sanction hearing set for 22 February, and to conclude the court process by the end of March.