AirAsia Group announced it plans to raise $113 million in a private share sale to improve its financial performance and to address its cash flow position. The company said in a stock exchange filing that the sale would be used “expeditiously for working capital purposes, as well as marketing expenses and technology expenditure for the initiatives under AirAsia Digital.
AsiaAsia, like other airlines around the world, has been struggling to survive as the COVID-19 pandemic has severely curtailed air travel. The company reported a fifth consecutive quarterly loss in November. The proposed sale includes the issuance of up to 20 percent of its total existing shares, or 668.4 million shares, to be placed with third-party investors to be identified later, the airline group said in the filing. AirAsia said it will continue to explore other fundraising options or corporate proposals to improve the group’s financial performance in the longer term.
The company said this latest share sale will “not fully address the group’s current financial concerns as the estimated gross proceeds…would not be sufficient to meet its long-term cash flow requirements. However, the proposed private placement will serve as an interim measure to address the immediate cash flow requirements of the group while the management of the company continues to explore other available options and/or corporate proposals to be undertaken with the intention to improve the group’s financial performance in the longer term”.
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