Capital A, the Malaysian owner of AirAsia, has successfully completed a private placement to raise 1 billion ringgit ($226 million). Group CEO Tony Fernandes confirmed this on Monday.
He stated, “We have a 1 billion (ringgit) placement, where there has been various stories, but I can confirm that it’s done.” He declined to provide further details at the press conference.
Bloomberg reported last week that Saudi Arabia’s sovereign wealth fund was preparing to invest $100 million in AirAsia. The firm was also in discussions with potential investors from Singapore and Japan.
AirAsia, established in 2001, has grown into one of Asia’s largest budget airline operators.
The pandemic’s travel restrictions significantly impacted parent company Capital A. Consequently, the Malaysian stock exchange classified it as PN17, indicating financial distress. The company aims to exit PN17 status to maintain its stock exchange listing.
On Friday, Capital A announced that the Malaysian stock exchange approved its plan to exit PN17 status. Fernandes said on Monday that they could achieve this by May.
This would allow the company to sell its AirAsia aviation business to long-haul unit AirAsia X. They announced this consolidation plan a year ago, aiming to combine long and short-haul operations under a single AirAsia brand.
Before the completion of this sale, Capital A’s shareholders must approve the plan to exit PN17 status. Additionally, Malaysia’s high court must approve Capital A’s planned capital reduction. Capital A also needs to demonstrate two profitable quarters, according to Fernandes.
Fernandes said, “Already the fourth quarter we were profitable, and we are looking at our forecast, Capital A will be very profitable in the first quarter. So we think by May, Capital A will be out of PN17 fully.”
Capital A intends to retain 18% of the resulting AirAsia airline group. Furthermore, it will retain its non-aviation businesses, including logistics firm Teleport and aircraft maintenance company Asia Digital Engineering.
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