Thai AirAsia majority owner in fund raising

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Asia Aviation, the parent company of Thai AirAsia, plans to raise as much as 17.9 billion baht (US$535 million) in new loans, share sales and convertible-debt offerings as part of a restructuring plan to help it survive the COVID-19 pandemic and the effects it has had on aviation. Asia Aviation Chief Executive Officer Santisuk Klongchaiya said the fund raising should allow the airline to increase flights amid an expected recovery in tourism and travel as Thailand gradually reopens to international travellers.

Download the stock exchange filing here.

Asia Aviation plans to raise a total of 8.8 billion baht from a private share sale to Malaysia’s AirAsia Group and an individual investor. That will comprise around 4.5 billion of new shares to AirAsia to raise 7.8 billion baht and another sale to a group of investors led by Pitharn Ongkosit, the chief executive officer of KCE Electronics Pcl, to raise 1 billion baht. The company will also raise 2.2 billion baht from sales of convertible bonds and 3 billion baht from a rights offering. Around 3.9 billion baht will come from loans.

Asia Aviation, which owns a 55 percent stake in Thai AirAsia, will use most of the proceeds to acquire the shares of Thai AirAsia it doesn’t already control. Other funds will be used to repay debt.

“Recently, the company and Thai AirAsia have attempted every possible avenue to increase the liquidity of Thai AirAsia, including the seeking of new investors to jointly provide financial support to Thai AirAsia, the conversion of Thai AirAsia’s current liabilities to equity, and negotiating with various creditors,” Asia Aviation said in a stock exchange filing. “The company and Thai AirAsia have used their best efforts to implement the Corporate and Capital Restructuring Plan which was approved by the Board of Directors’ Meeting on 26 April 2021. Nevertheless, the Corporate and Capital Restructuring Plan of the Company and Thai AirAsia proved to be complicated and time consuming to implement. The Company, therefore, has revised the Corporate and Capital Restructuring Plan as well as negotiated with new investors, shareholders, creditors of the Company and Thai AirAsia on many occasions until a conclusion was finally reached.”

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