AirAsia Group completes $233mn rights issue
AirAsia Group will complete its renounceable rights issue to shareholders on December 31, raising MYR974.5 million ringgit (USD233.3 million) and “providing a strong injection to support the overall group fundraising strategy,” it said in a Bursa Malaysia filing on December 29.
The AirAsia (AK, Kuala Lumpur Int’l) parent announced the fundraising initiative in July, saying at the time that it would raise up to MYR1.024 billion ringgit (USD245 million), with the funds to be diverted to the group’s working capital and operational costs, as well as to boost the group’s efforts to diversify through its AirAsia Digital businesses.
The cash call involves seven-year redeemable convertible unsecured Islamic debt securities (RCUIDS), based on two RCUIDS with one warrant for every six AirAsia shares held. Each RCUIDS security is also convertible to one new AirAsia share on a one-to-one basis. The latest filing said that the RCUIDS and warrants would be listed on December 31.
Proclaiming that the “airline recovery is well underway” and that AirAsia Group’s “fundraising strategy is on track to provide sufficient liquidity through 2022,” group CEO Tony Fernandes said: “After the most challenging two years in commercial aviation history, the end is finally within reach. We have survived the pandemic. We have restructured, relaunched, and are now in a stronger position to recover faster.”
He elaborated that “we have used the downtime in flying to review every aspect of our airline operations” and “we have also transformed into a digital travel and lifestyle services group which isn’t solely reliant on airfares alone.” He listed AirAsia Group’s “super app [which] achieved unicorn status earlier this year, under two years after it was valued at over USD1 billion by Credit Suisse” and the fintech venture BigPay.
As for the group’s airline businesses, “we are gradually resuming flights in all of our key markets and look forward to returning to pre-Covid levels on many of our popular routes in the new year alongside strong vaccination rates, better testing procedures, and education.”
As additional fundraising, Fernandes recalled that the airline had also obtained a guarantee from state-owned financial institution Danajamin Nasional for 80% of a syndicated loan of MYR500 million (USD119.7 million), a development the group had announced in early October. In total, he said, the group has achieved over MYR2.5 billion (USD598.5 million) in funds raised, “providing strong liquidity to ramp up operations through next year when we expect to be sustainable and driving shareholder value once again.”
In related news, Asia Aviation, owner of Thai AirAsia (FD, Bangkok Don Mueang), disclosed in a Stock Exchange of Thailand filing on December 28 the details for an allocation of up to 1,714,285,714 new shares as part of a three-part recapitalisation package initially announced in October and then approved by shareholders one month ago.
The shares will be offered at THB1.75 baht (USD0.0525) per share, it said, over a total of five business days from January 10 to January 14, 2022.