AirAsia Group raises $81.8mn, embraces new investors

AirAsia Group has raised a total of MYR336.46 million ringgit (USD81.83 million) following the completion of the second tranche of a private share placement, which issued an additional 100,367,362 new ordinary shares, representing 3% of the company’s total issued shares, the group said in a statement on March 17. It follows the initial tranche of 11.07%, or 369.85 million shares, issued on February 19. Overall, this means that the AirAsia (AK, Kuala Lumpur Int’l) parent issued 470.21 million new shares, representing 14.07% of its total issued shares. Stanley Choi Chiu Fai, a Hong Kong-based entrepreneur and professional poker player, participated in the share issue, raising his stake to 8.96%, bourse filings showed. However, he chose not to raise his stake in the second tranche noticeably. David Bonderman, founder and chairman of TPG Capital, a San Francisco-based investment firm, chairman of Ryanair for over 20 years until summer 2020, was among the other “key investors that anchored the private placement exercise” alongside several fellow TPG executives, investing in a personal capacity, according to the AirAsia Group statement. Montreal-based investment firm Aimia Inc and other local and international institutions also invested, but the group did not reveal the size of their investments. Aimia also holds a 48.9% stake in PLM Premier, the owner of Club Premier, the loyalty firm in Mexico that operates the Aeroméxico frequent flyer programme. “This placement forms a significant part of our overall fundraising exercise to ensure liquidity throughout 2021. Of the total gross proceeds, AirAsia will allocate funds to support fuel hedging settlements, general working expenses, and aircraft lease and maintenance payments, and fund airasia digital business units, namely the airasia super app and BigPay fintech platforms,” group chief executive Tony Fernandes said. “On a wider scale, the private placement is a major vote of confidence towards the recovery of the aviation and tourism industries that have been severely battered by the Covid-19 pandemic,” he added. As previously reported, the company has said it plans to raise up to MYR2.5 billion (USD608 million) through debt and equity measures. In related news, the High Court of Malaysia granted AirAsia X (D7, Kuala Lumpur Int’l) a restraining order for three months on 15 of its creditors, to assist it with its ongoing restructuring. The order, which the airline applied for, gives the creditors a chance to engage in amicable discussions without “extraneous considerations,” according to a March 17 exchange filing. AirAsia X proposed to its creditors in October 2020 to restructure MYR63.5 billion (USD15.2 billion) in liabilities, cutting shareholder capital at the airline by about 90%.