AirAsia Nears $235M Capital Injection Amid Restructuring

AirAsia is close to securing up to MYR1 billion (USD235 million) in fresh capital from undisclosed investors, according to deputy group CEO Farouk Kamal. Speaking at an industry event, Kamal described the talks as broader than just an equity deal, involving various transaction components, though he did not disclose further details or a timeline.

The capital injection is part of a larger restructuring plan aimed at stabilizing the Malaysian low-cost carrier and helping its parent company, Capital A, exit Bursa Malaysia’s PN17 financial distress classification. The deal is a key step in a “regularisation” process that will see AirAsia X acquire AirAsia from Capital A. Post-acquisition, Capital A will hold only an 18% stake in AirAsia X and have no direct ownership in AirAsia or AirAsia Aviation Group, the brand’s regional joint venture platform.

Earlier in 2024, reports surfaced that Saudi Arabia’s Public Investment Fund (PIF) could invest USD100 million to support AirAsia’s fleet expansion. While the airline has not confirmed those reports, it recently announced plans for a new “virtual hub” in the Middle East, with Saudi cities under consideration as transit points for connecting Southeast Asia and Europe.

The MYR1 billion funding round is a key condition of the restructuring deal and is expected to boost liquidity, support regional growth, and enhance AirAsia’s competitive position in the post-pandemic market. The finalization of the capital raise would mark a significant step forward in the group’s financial recovery and future expansion strategy.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com