KUALA LUMPUR (Oct 7): AirAsia X Bhd’s (AAX) share price fell in Bursa Malaysia morning trade today after the budget airline said yesterday it is undertaking a group-wide debt and corporate restructuring to avoid liquidation as the company contends with the impact of the Covid-19 pandemic.

At 9.08am today, AAX’s share price was half a sen or 10% lower at 4.5 sen.

The stock was the most active so far on Bursa today, seeing some 19 million shares traded. At 4.5 sen, it had a market value of about RM187 million.

Yesterday, AAX said in a Bursa filling that the company, which has proposed a restructuring of approximately RM63.5 billion of debts, is also planning a 90% reduction in the firm’s issued share capital and consolidation of every 10 existing AAX shares into one share.

"Globally, the commercial airline industry continues to face uncertainty as a result of the unprecedented Covid-19 pandemic.

"To avoid a liquidation and to allow the airline to fly again, the only option is for AirAsia X to undertake a group-wide debt and corporate restructuring, and update its business model to survive and thrive in the long term. 

"The right-sizing of the group's level of operations and its financial obligations are prerequisites for raising any fresh capital, comprising both equity and debt, that will be used to support the implementation of the group's revised business plan,” AAX said.

Today, MIDF Amanah Investment Bank Bhd analysts wrote in a note that what is left right now is for AAX’s creditors to make a resounding decision on whether to accept or reject the airline’s proposals.

The analysts said AAX’s share price had retraced significantly. As such, MIDF upgraded its recommendation for AAX shares to "neutral" from "trading sell" previously, "premised on potential acceptance by the lenders”, the analysts said.

They said MIDF, however, maintained its target price (TP) for AAX at five sen.

Meanwhile, at Public Investment Bank Bhd, analyst Nur Farah Syifaa’ Mohamad Fu’ad wrote in a note today that pending further developments of AAX’s debt and corporate restructuring, the research house made no changes to its current forecasts for the airline. 

"Our 'underperform' call for AirAsia X is maintained with an unchanged TP of one sen,” Nur Farah Syifaa’ said.