KUALA LUMPUR (Reuters) -- A Malaysian court has approved a restructuring scheme for budget long-haul carrier AirAsia X Bhd that will pay just 0.5% of debt owed and end existing contracts, the airline said in a Thursday filing.
The High Court of Malaya granted a sanction order at a hearing on Thursday and "the proposed debt restructuring will take effect upon lodgment of the sanction order with the Registrar of Companies of Malaysia," the filing said.
Last month, AirAsia X's creditors agreed to the scheme to restructure 33.65 billion ringgit ($8 billion) of liabilities.
Around half was owed to its largest creditor Airbus SE for terminating airplane orders.
It first proposed restructuring in October last year, but faced more than a dozen creditors including lessors who sought court action to dismiss its scheme.
The airline, a sister carrier to cash-strapped AirAsia Group Bhd, had warned of liquidation if creditors did not agree to the plan, which will be followed by a 500 million ringgit equity raising.
AirAsia X will now start a recapitalization, expected to be completed in the first quarter of 2022.