Latham & Watkins has advised Hong Kong Airlines on its successful US$6.2 billion debt restructuring, which upon completion will restore the company to financial stability and enable it to continue to operate on a going concern basis, just in time as Hong Kong lifts most of its COVID-related travel restrictions.
The holistic restructuring will allow Hong Kong’s second largest airline to take off again with a clean slate by addressing over 90% of the airline’s financial and operating liabilities (including bank debts, leases and trade creditors, amongst others), bring in new equity investment of HK$3 billion and streamline the company’s air fleet and corporate structure. This is the first time that a parallel Hong Kong scheme of arrangement and UK restructuring plan have been approved by the courts in the two jurisdictions to effect the restructuring of Hong Kong, PRC and English law governed debts, including certain perpetual securities issued by an offshore affiliate and guaranteed by the company.
The Latham team was led by Hong Kong restructuring partner Howard Lam and London restructuring partner Bruce Bell, with Hong Kong associate Flora Innes and London associates James Hollingshead, Jonathan Akinluyi, Tom Davies, Hongbei Li, and Amy Simmons. Advice was also provided on the equity investment transaction by Hong Kong corporate partner Frank Sun and associate Michael Ning, with Shanghai associate Louise Deng; on litigation matters by Hong Kong partner Dominic Geiser and associates Rainbow Au-Yeung and Evangeline Tsui, with London partner Oliver Browne and associates Robin Spedding and Callum Rodgers; and on debt capital markets matters by London partner Manoj Tulsiani and associates Carolina Gori and Daria Latysheva.