Air Belgium Creditors to Vote on Restructuring Plan
Creditors of Air Belgium (KF) are set to vote on the airline’s reorganisation plan on September 4, 2024, or submit proxy votes by August 30. This vote is crucial for the airline’s court-led restructuring process, known as procédure de réorganisation judiciaire (PRJ), aimed at managing its debt and avoiding insolvency, reported ch-aviation.com.
According to Aviation24, the reorganisation plan, finalised on August 14, 2024, outlines key strategies to stabilize Air Belgium’s finances. The plan focuses on ensuring full refunds for passengers while imposing significant reductions on payments to other creditors. Developed with the help of independent reorganisation expert Bernard Vanham, the plan is now fixed and cannot be altered; creditors must choose to accept or reject it. The outcome of the vote will be announced after the September 4 court hearing.
The plan categorizes creditors into different classes with specific repayment terms:
- Passenger Refunds: Passengers, classified as “Class H” creditors, will receive full refunds by April 2025.
- Other Creditors: Payments to other creditor groups will face reductions, with banks seeing a 40% cut in their claims, and lenders and shareholders potentially facing up to a 95% reduction.
If approved, the reorganisation procedure will conclude on September 19, 2024, and Air Belgium will start repaying claims from that date. Rejection of the plan could result in severe financial consequences for both the airline and its creditors.
Air Belgium declined to comment, citing confidentiality and the sensitive nature of the information. A spokesperson stated, “The company values the confidentiality of our partners’ and customers’ information and adheres to the privacy of these individual exchanges.”
The restructuring process began a year ago when Air Belgium filed for PRJ on September 18, 2023. Under Belgian law, a PRJ can be extended for up to 12 months. In May 2024, the judge overseeing the case granted a four-month extension.
On July 9, 2024, the Business Court of Walloon Brabant reclassified the procedure from an “amicable settlement” to a “collective agreement.” This reclassification is deemed essential for successfully completing the PRJ under favorable conditions.
Since the restructuring filing, Air Belgium has suspended its scheduled passenger flights, redirecting its resources towards more profitable operations, including ACMI (Aircraft, Crew, Maintenance, and Insurance) services for passenger and freight transport.
In September 2023, it was reported that Sichuan Airlines Group, a Chinese state-owned enterprise and parent of Sichuan Airlines (3U, Chengdu Shuangliu), expressed interest in investing in Air Belgium, contingent upon improved financial conditions.
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com