AirAsia raising US$233 million in rights issue

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AirAsia Group Berhad (AAGB) recently announced it will raise 974.5 million ringgit (US$233.3 million) via a renounceable rights issue to its existing shareholders that closed on 31 December. AirAsia Group CEO Tony Fernandes said “After the most challenging two years in commercial aviation history, the end is finally within reach. We have survived the pandemic. We have restructured, relaunched and are now in a stronger position to recover faster. We have used the downtime in flying to review every aspect of our airline operations with a strict focus on cost containment and implementing an optimal network and fleet strategy to put in place a solid platform to return to the skies leaner and stronger than ever in all key markets.”

AirAsia Group CEO Tony Fernandes. (PHOTO: Shutterstock)

Fernandes said the company has “transformed into a digital travel and lifestyle services group which isn’t solely reliant on airfares alone, providing a more robust and resilient model for the future”.

“Earlier this year our super app achieved unicorn status in under two years after it was valued at over US$1 billion by Credit Suisse,” Fernandes said. “Our fintech venture BigPay raised up to US$100 million in financing from SK Group as it continues to transform fintech interconnectivity in the region by democratising financial services, providing accessibility and inclusivity, serving the underserved just like the airline does, including SMEs and start up businesses. BigPay is now focusing on securing a bank lending licence to expand its low rate offerings.”

The rights issue entailed the issuance of seven-year Redeemable Convertible Unsecured Islamic Debt Securities (RCUIDS) with a nominal value of RM0.75 each, plus free detachable warrants, on the basis of two RCUIDS with one warrant for every six AAGB shares held. As a key component of AAGB’s fund-raising initiatives, the Rights Issue will enable AAGB to support various segments of the group, including but not limited to, working capital and other operational costs incurred due to the outbreak of the global COVID-19 pandemic and costs required to ramp-up operations to be prepared for the rebound of international travel, balanced with funding growth of the various airasia digital business units.

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