By Liz Lee

KUALA LUMPUR (Reuters) – Malaysia’s AirAsia X Bhd (AAX) has made “substantial progress” in its months-long talks with creditors as it aims to convene meetings with them to vote on a restructuring scheme by the end of October, its chief executive said.

CEO Benyamin Ismail said that discussions and negotiations have continued with the lessors of Airbus SE (OTC) and other service providers. He declined to elaborate on what had been reached.

AirAsia Group’s affiliate, the airline has been in contact with potential investors to recapitalize it and hopes to conclude discussions before the end of this year.

We plan to raise funds in December, and complete that as quickly as we can. Benyamin indicated that although he declined to disclose details on potential investors, he said they were talking with all parties and would get more information towards the year’s end.

Benyamin indicated that negotiations with creditors have reached the end of their stages, and most creditors want the airline’s restructuring to proceed.

We are confident we will get it through. “The main commercial terms have been resolved,” he stated, speaking of negotiations with lessors. He stated that no objections were raised to the proposal to place engine maker Rolls-Royce in the same category as other creditors.

AAX stated Monday that talks are ongoing, however “various letters have been signed by creditors.”

Numerous lessors signed other agreements with Southeast Asian carriers to purchase planes back early, or to reduce their rates temporarily to assist them in surviving the crash in airline travel due to the coronavirus epidemic.

On May 18, drafts of the term sheets and lock-up agreements were sent to lessors. AAX reported that they are currently being reviewed by the lessors.

According to the airline, it had received letters from three major creditors to vote in support of the scheme: Honeywell International (NASDAQ;), Bridgestone Aircraft Tire Company, and Sky High I Leasing Company.

AAX presented last October a restructuring plan of 64.15 billion ringgit (or $15.43 billion) in debt. This proposal was met with opposition from several creditors, including lessors.

Airbus,the airline’s biggest creditor, filed a suit in December https://www.reuters.com/article/us-airasia-x-lawsuit-airbus-exclusive-idUSKBN28W0JK saying it stands to lose more than $5 billion worth of orders if the scheme goes through. It refused to comment on the restructuring.

This week, the court granted AAX an extension https://www.reuters.com/business/aerospace-defense/court-grants-malaysias-airasia-x-extension-hold-creditors-meeting-by-march-2021-09-15 to hold its creditors meetings by March next year, when a restraining order https://www.reuters.com/article/airasia-x-restructuring-idCNL2N2O00AA preventing creditors from filing fresh lawsuits against the airline expires too.

($1 = 4.1570 ringgit)