Malaysian low-cost carrier AirAsia Group said Monday (12 July) that it plans to raise up to 1 billion ringgit (US$238.72 million) through a rights issue as it continues to raise money to survive the COVID-19 pandemic. The rights issue will be used to fund AirAsia’s working capital and other operational costs, and to grow its digital businesses, the company said in a statement.
“The exercise will provide a platform to seek a fresh funding injection from shareholders to maintain liquidity during the downtime in flying and fuel growth of the key non-airline digital businesses,” AirAsia Chief Executive Tony Fernandes said.
The company said it has made progress in talks to secure “a number of other fundraising initiatives.” The rights issue, which includes seven-year redeemable convertible unsecured Islamic debt securities, is expected to be completed in the fourth quarter.
AirAsia has been focusing on its digital business recently. Last week, it agreed to buy Indonesian ride-hailing and payments firm Gojek’s Thailand business. It has also applied for a digital banking license in Malaysia.
Fernandes said in the company’s statement that “fundraising is a critical component of our recovery strategy. The timing is right, as vaccines are being rolled out aggressively in all of our key markets, alongside better education and testing. There is light at the end of this long tunnel.
“While the airline will continue to underpin all operations, over the past 18 months, our digital transformation strategy has been gaining strong momentum with significant improvements across all key metrics for our airasia Super App, logistics and e-commerce venture Teleport and our for BigPay fintech business. Last week our Super App was estimated to be valued at over USD 1 billion which is a strong testament to the strategy we have put in place to become much more than just an airline – now a digital lifestyle company anchored on travel,” Fernandes said.