KUALA LUMPUR (July 1): AirAsia X Bhd (AAX), the low-cost long-haul affiliate of AirAsia Aviation Group, said it is in the midst of regularising its financial position via a proposed debt and corporate restructuring and fundraising, after slipping into Practice Note 17 (PN17) status last year. Thereafter, it will implement a revised business plan to turn around its financial performance.

It has about four months to submit the regularisation plan to the relevant authorities for approval.

"After the completion of these proposals, the company will submit a regularisation plan pursuant to PN17 of the listing requirements to regularise its condition," it said in a bourse filing on Friday (July 1).

AAX added that it will make the necessary announcement in relation to any material development accordingly.

The airline slipped into PN17 status in October 2021 after its external auditor Messrs Ernst & Young PLT expressed a disclaimer of opinion in its audited financial statements for the 18-month financial period ended June 30, 2021.

So far, the debt restructuring proposal has been approved by its creditors in November 2021 and by the High Court of Malaya in December 2021. As a result, AAX was able to write RM33 billion of liabilities and provisions for liabilities back to profits.

This in turn resulted in the airline returning to the black in its third financial quarter ended March 31, 2022 (3QFY22), registering a net profit of RM33.62 million on revenue of RM113.02 million.

The airline also intends to raise funds of between RM150 million and RM500 million to shore up its balance sheet. In February, it had proposed a one-for-one rights issue and a special issue to raise a total of RM166 million, but AAX revealed in May that it was still in the midst of securing the underwriter(s) for the rights issue of RM100 million.

AAX shares closed down 1.94% at 50.5 sen on Friday, giving it a market capitalisation of RM209.48 million.