AirAsia Group secures $72mn loan, fights airport lawsuit

AirAsia Group has disseminated among its units an MYR300 million ringgit (USD72 million) loan from Sabah Development Bank, it said in a Bursa Malaysia stock exchange filing, but a government guarantee does not back the loan as it had hoped. The AirAsia (AK, Kuala Lumpur Int’l) parent previously said it needs to raise MYR2.5 billion (USD600 million) by the end of 2020, MYR1.5 billion (USD360 million) of which could be in the form of loans from banks. However, this particular loan is partly to fund specific development projects as well as a project to turn the Sabah state capital’s airport, Kota Kinabalu, into an international hub for AirAsia’s operations and enhance and promote Sabah products and tourism destinations. “The main purpose of the loan is to enhance logistics in Sabah by increasing its supply chain and connectivity, creating over 100,000 new jobs in the process,” the October 23 filing claimed. Sabah Progressive Party (SAPP) president Yong Teck Lee urged the state’s government to stop the loan, arguing that was not in the state’s best interests to risk its limited funds to keep AirAsia running. “If any help is needed to keep either AirAsia or Malaysia Airlines afloat, then it is for the federal government to take up the task,” he said. Meanwhile, Malaysia Airports Holdings has initiated a lawsuit against AirAsia X (D7, Kuala Lumpur Int’l) to demand payment of an allegedly owed sum of MYR78.16 million (USD18.77 million) and applied to be excluded from the long-haul low-cost carrier’s proposed debt restructuring scheme. As previously reported, AirAsia X proposed to its creditors on October 7 to restructure MYR63.5 billion (USD15.2 billion) in liabilities, reconstituting it into an acknowledgement of indebtedness for a principal amount of about MYR200 million (USD48 million).