(Oct 23): VietJet Aviation JSC faces seizure of ticket revenues and aircraft after a UK court appointed receivers to help recover more than US$250 million (RM816 million) owed to a London-based buyout fund — effectively hobbling the carrier’s operations outside of Vietnam.
A London judge granted the order to a unit of FitzWalter Capital Ltd on Thursday, giving receivers from Alvarez & Marsal powers to take control of assets and redirect cash towards repayment of the debt.
The order goes significantly further than a worldwide freezing injunction imposed on VietJet just last week. Unlike that, it allows the receivers to intercept assets and cash flows that VietJet had previously been free to collect and use for its day-to-day operations.
That includes ticket-sale proceeds, with the receivers empowered to instruct travel agents, other airlines and credit-card acquirers to pay amounts due to VietJet directly to them, according to the receivership order.
They can also take delivery of new aircraft from manufacturers including Airbus SE and Boeing Co, seize and sell existing aircraft, engines and spare parts outside Vietnam. They can also collect money from VietJet’s overseas bank accounts as well as maintenance reserves and deposits held by lessors, and pre-delivery payments made to manufacturers.
VietJet didn’t immediately respond to a request for comment.
The receivers can also seize VietJet’s interests in offshore subsidiaries, including entities in the British Virgin Islands, Singapore, Ireland and the Cayman Islands. Their powers include exercising voting rights, replacing directors, selling shares and procuring the winding up of companies.
Assets located in Vietnam are excluded from the order. VietJet is barred, however, from moving assets covered by the receivership into Vietnam, changing contracts relating to them without the receivers’ consent or otherwise taking steps that would undermine the receivers’ work.
VietJet and its directors are required to comply with the order, with breaches potentially amounting to contempt of court.
The company’s legal saga began in 2021, when it stopped making lease payments on four aircraft during the pandemic. The sum owed had grown to US$180 million by 2024 and has since topped US$250 million as the litigation dragged on. It’s unclear whether the company will appeal the latest ruling.
VietJet Group has 146 aircraft in its fleet as of Oct 23, according to industry data provider Cirium. The airline, which is the second largest in Vietnam, has major operations also in Thailand. The group also has in excess of 400 aircraft currently on order, the Cirium data also shows.
Uploaded by Felyx Teoh