Hong Kong Airlines (HX, Hong Kong International) has successfully secured creditor support for a USD6.2 billion debt restructuring plan after months of negotiations. In a filing note to the UK High Court this week, Latham & Watkins (London) LLP representing the airline said the necessary support was secured at a December 1 creditors meeting, with the restructuring plan now going back before courts in the UK and Hong Kong for approval.
As previously reported in ch-aviation, Hong Kong Airlines needed letters of support from at least 75% of its creditors to pass the proposed restructuring plan. The Liaoning Fangda owned airline had struggled for some time to secure the required support, offering some creditors a revised upfront cash offer and even mulling a creditor cross-class cram-down.
At the December 1 meeting, Hong Kong Airlines secured the support of 57 unsecured creditors owed USD2.6 billion. That amount represents 90.83% of total unsecured creditor claims against the carrier. Thirteen critical lessors, namely aircraft lessors, voted in favour of the restructuring plan. Despite owing the lessors USD1.08 billion, 100% of them voted in favour. Finally, 125 perpetual note holders owed USD364.3 million and representing 79.74% of all such creditors approved the restructuring plan.
Subject to court approval, the support clears the way for Hong Kong Airlines to commence its restructuring plan which involves a restructuring of its debt, downsizing the fleet by around two-thirds, and receiving a USD385.9 million capital boost from its owner.
The matter will be back before the UK High Court on December 9 and the Hong Kong High Court will schedule a hearing before December 14.
