AirAsia’s placement exercise draws investors’ interest


AIRASIA Group Bhd’s (AAGB) successful private placement exercise has seen the company exit its penny stock status as investors showed confidence in the corporate exercise and revival plan of the low-cost carrier.

The stock closed at a nine-month high at RM1.05 yesterday and hit a high of RM1.06 and low of RM1.02 in intraday trade.

In a filing to Bursa Malaysia recently, the company announced it proposed to raise some RM87 million via second tranche share placement based on an indicative share price of 86.5 sen a share. The second tranche will comprise up to 100.4 million shares.

The indicative price represents a discount of 9.68% to the five-day volume-weighted average price (VWAP) of 95.77 sen per share.

In January this year, the cash- strapped carrier proposed to raise RM454.51 million via shares issue up to 668.39 million new shares or 20% of its current share capital.

It’s unlikely the new shares will be placed out to directors, major shareholders, chief executives of AAGB, holding companies of AAGB, persons connected to the aforesaid and nominee corporations (unless ultimate beneficiaries are disclosed).

“The actual number of placement shares to be placed out under the second tranche will depend on the final acceptance by the identified places,” AAGB stated in the exchange filing on Tuesday.

The proceeds from the private placement exercises are expected to be utilised for fuel hedging settlement, general working capital expenses, aircraft leasing and maintenance payments and for its digital business units, Maybank Kim Eng Research stated in a note in January when AAGB proposed to raise funds through the first tranche.

“AAGB concedes the proceeds will not fully address its current financial concerns and may further access the equity and debt capital markets,” the brokerage stated in its report.

Last month, Hong Kong-based merger and acquisition expert, also a top poker player, Stanley Choi Chiu Fai bought a block of the private placement shares and increased his stake to 8.96% in the low-cost carrier via his private vehicle Positive Bloom Ltd. On Feb 18, he bought 167.1 million AirAsia shares.

“It will even take one or two years before the travel and tourism industry will fully recover and the potential is tremendous,” Choi was quoted as saying to Bernama. “So, my investment is for the long term,” he added.

AirAsia’s stock price has advanced 8.2% in the past one year. The company is scheduled to release its financial results tomorrow.