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Bond Market News
HK Airlines Plans $6.2bn Debt Restructuring
September 29, 2022
To avert insolvency, HK Airline has planned for an HK$ 49bn ($6.2bn) debt restructuring through UK and Hong Kong courts. The HNA Group carrier stated, “HK Airline is seeking court approval to convene meetings of its creditors and put forward its restructuring proposal, which would include a significant haircut on the outstanding debt. Unsecured creditors and critical lessors are expected to recover about 5% of the money owed to them, as well as subsequent pro-rata cash payments if the turnaround succeeds.” The Hong Kong and UK court hearings are scheduled on October 13 and October 25 respectively. The restructuring proposal needs 75% of creditors, and has currently received approval from about 73%. A failure in securing approval will likely to lead to an insolvency liquidation. Financial and operating aircraft lessors are seeking claims of HK$22.5bn ($2.9bn), bank lenders and financial creditors are owed HK$5.7bn ($730mn), and related party creditors have claimed HK$6.8bn ($870mn). The airline plans to cut its fleet by almost two-thirds and HNA Aviation along with unnamed JV partners have planned to inject HK$3bn ($380mn) to revive its business.
HK Airline’s USD 15.758% Perp traded flat at 22.8 cents to dollar.
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