Malaysia Airlines (MH, Kuala Lumpur Int'l) parent Malaysia Aviation Group has obtained court approval in the United Kingdom to proceed with a major component of its “comprehensive” debt restructuring efforts, it said in a statement issued late on January 20.

Late last year, the group issued a Practice Statement to some of its creditors revealing the company’s intention to file a “scheme of arrangement”, a court-approved deal under UK law between a company and its shareholders or creditors related to their rights.

A hearing was held, as scheduled, on January 20 and the court allowed the group to convene a meeting of creditors to consider the proposed scheme. The outcome of that meeting, whose date was not disclosed, will be reported back to the court at a sanction hearing set for February 22.

The group claimed that its “active discussions” with all key stakeholders meant it had “managed to obtain overwhelming support” to carry out its MYR16 billion ringgit (USD3.97 billion) debt restructuring, but “there remains a small minority of creditors that have yet to indicate their support for the restructuring.”

This resulted in part of the restructuring being implemented via the scheme of arrangement, it explained, which will be proposed by its leasing subsidiary MAB Leasing Limited in a bid to win over the minority of creditors.

Malaysia Aviation Group said it expected that the UK court process and the restructuring would conclude by the end of the first quarter of 2021.

The group has been in negotiations with about 40 creditors, lessors, and suppliers since September 2020 to accept a haircut on their outstanding debts as part of the restructuring plan. It warned that unless it gets approval from creditors holding at least 75% of the debt, as required by law, it could file for bankruptcy.