A Hong Kong-based airline backed by the failed Chinese conglomerate HNA Group Co. Ltd. aims to restructure HK$49 billion ($6.2 billion) of debt through UK and Hong Kong courts to stave off insolvency.

Hong Kong Airlines is seeking court approval to convene meetings of its creditors and put forward its restructuring proposal, which would include a significant haircut on the outstanding debt, the carrier said in a statement.

Unsecured creditors and critical lessors are expected to recover about 5% of the money owed to them, as well as subsequent pro-rata cash payments if the turnaround succeeds, the airline said.

A hearing by the High Court of Hong Kong is scheduled to take place on Oct. 13. The UK court hearing is scheduled for Oct. 25. 

The restructuring proposal needs the backing of 75% of creditors, and the company has received letters of support for the plan, in principle, from about 73%, the airline said in a practice statement letter. Failure to gain approval is likely to lead to “insolvent liquidation,” the carrier said.

Financial and operating aircraft lessors formed the largest group of claims, owed HK$22.5 billion. Bank lenders and financial creditors are owed HK$5.7 billion, and related party creditors HK$6.8 billion.

The debt-ridden carrier plans to cut its aircraft fleet by almost two-thirds, and HNA Aviation and unnamed joint-venture partners plan to inject HK$3 billion to help rescue the business.