AirAsia X, the Malaysian medium-haul airline, saw a significant drop in its shares following the rejection of its application to have its financially distressed classification removed. The company’s shares fell by as much as 17% on Thursday afternoon, and are currently 8% lower at 2.08 ringgit ($0.44), reducing its year-to-date gains to 267%.
In a filing submitted on Thursday, AirAsia X announced that its application had been rejected by Bursa Securities, the securities regulator in Malaysia. However, despite the setback, Bursa Securities has granted AirAsia X an extension until January 17th to submit a restructuring plan.
AirAsia X stated that it will explore all available options, including the possibility of an appeal. The company initially applied to have its financially distressed status removed on July 20th, citing a recent improvement in its financial performance.
While awaiting the regulator’s decision, AirAsia X also requested a three-month extension for the submission of a restructuring plan in case their initial application was denied.
This classification of financial distress was assigned to AirAsia X by Bursa Securities back in October 2021, due to the losses incurred during the Covid-19 pandemic. As a result of this categorization, AirAsia X was required to submit a restructuring plan within 12 months to maintain its listing status.