Thai AirAsia parent to raise $419mn as Thailand reopens

Asia Aviation PCL (AAV), the parent company of Thai AirAsia (FD, Bangkok Don Mueang), has said it is seeking to raise THB14 billion baht (USD419.4 million) to fund a restart at the low-cost carrier following the “very negative impact on the company’s business and operating results” thrown up by Covid-19 and the Thai government’s strict travel restrictions.

Those restrictions are now starting to ease, as Thailand plots a reopening that will allow vaccinated arrivals from ten “low-risk” countries – including the United Kingdom, the United States, Germany, China, and Singapore – to skip quarantine from November. The other five countries have not yet been named, and the government will add more countries to the low-risk list in December.

In a 70-page report issued after an AAV board of directors’ meeting, filed to the Stock Exchange of Thailand on October 19, the company said it would issue convertible bonds and new shares worth THB14 billion. It also pledged to eventually acquire all of the shares in Thai AirAsia and boost the airline’s liquidity. AAV currently owns 55% of Thai AirAsia, while Malaysia’s AirAsia Group holds the remaining stake.

The restructuring, expected to conclude in the first quarter of next year, includes new shares worth THB8.8 billion (USD264 million) in a private placement to AirAsia Group and six high net-worth Thai investors. The senior unsecured convertible bonds will be allocated to two private placement investors to raise a total principal amount of THB2.2 billion (USD66 million).

The company will also increase its registered capital from THB485,000,000 (USD14.5 million) to THB1,285,000,000 (USD38.5 million), issuing 8 billion new ordinary shares to accommodate the conversion of the bonds. The subscription for the newly issued shares will take place from January 10 to January 14, 2022.

AAV said it would use the proceeds from the capital increase: to repay THB3.9 billion (USD117 million), plus interest, in loans that the company borrowed from financial institutions to acquire the newly issued shares in Thai AirAsia, a move by which its stake will rise from 55% to 69.2%; to purchase all the remaining shares in Thai AirAsia, representing 30.8%, totalling about THB4 billion (USD120 million); and to go towards the working capital of the group, including Thai AirAsia.

According to the ch-aviation fleets advanced module, Thai AirAsia currently operates a fleet of forty-five A320-200s, eleven A320-200Ns, and two A321-200NXs.