Capital A Secures $150 Million Five-Year Term Loan for AirAsia Group

Malaysian company Capital A, the owner of the AirAsia Aviation Group, has successfully secured a five-year term loan facility of up to USD 150 million from an undisclosed financial institution. The loan, as outlined in an October 3 Bursa Malaysia filing, is intended to support various financial needs within the AirAsia Group, including aircraft and engine maintenance costs and general working capital requirements.

The facility, which does not necessitate shareholder approval, is backed by a corporate guarantee provided by Capital A. The filing emphasizes that the board of directors deems the loan to be in the ordinary course of business and believes it is in the best interest of the group.

Capital A, with substantial stakes in AirAsia, AirAsia X, Indonesia AirAsia, Philippines AirAsia, Thai AirAsia, Thai AirAsia X, and Teleport, entered PN17 status (financial distress) on the Malaysian Stock Exchange in January 2022. The exchange places PN17 status on companies it considers financially distressed, obliging them to present a regularisation plan to address their financial situation or face delisting.

In its most recent update on October 2, Capital A hinted at submitting its regularisation plan, outlining steps to rectify its financial condition. Typically, companies must submit such a plan within 12 months of obtaining PN17 status. Capital A received several extensions, with the latest one granted in July, extending the deadline until October 7.