AirAsia raises RM87m from 2nd share placement exercise


AIRASIA Group Bhd’s share price rose some 3.5% or four sen to RM1.18 yesterday after successfully raising some RM87 million in fresh funds via a private placement and despite short-sellers targeting the stock after its recent raise.

The cash-strapped low-cost carrier successfully placed out its second tranche of 100.37 million new ordinary placement shares, representing 3% of the company’s total issued shares, at an issue price of 86.5 sen each.

The money reinforces its corporate exercise to recapitalise the company and achieve its larger plan of raising up to RM2 billion-RM2.5 billion via a combination of debt and equity to finance, among others, the working capital requirements of the group.

The placement followed the initial placement tranche of 11.07% or 369.85 million shares on Feb 19 that saw the emergence of Hong Kong-based investor Dr Stanley Choi Chiu Fai of the Head & Shoulders Financial Group as a substantial shareholder after upgrading his share position to 8.96% from below 5% previously.

Other key investors that anchored the private placement exercise included US billionaire private-equity investor David Bonderman and several partners at TPG Capital.

Bonderman was a long-standing chairman of Ryanair Holdings plc for over 20 years until last year. Other TPG Capital Asia partners investing in the placement were Tim Dattels, Ganen Sarvananthan and Zubin Irani.

Another investor was Canada-based Aimia Inc, an investment holding company, AirAsia noted in its release.

In total, both private placement tranches delivered 470.21 million new shares, accounting for 14.07% of AirAsia Group’s total issued shares and raised a total of RM336.46 million, AirAsia said in a statement yesterday.

The shareholders of AirAsia Group and Bursa Malaysia Securities Bhd had earlier approved for AirAsia Group to undertake the private placement exercise of up to 20% of AirAsia Group’s total issued shares.

“The successful private share placement and the overwhelming response that it received from renowned local and foreign inves- tors were clear testaments to Air- Asia’s strong fundamentals and our tremendous future potential, especially with our pivot into digi- tal and data-driven businesses.

“We are thrilled by the investors’ confidence in our turnaround plans and this proves our capabilities to raise funds from both institutional and private strategic investors in the capital market, both locally and abroad,” group CEO Tan Sri Dr Tony Fernandes noted.

He added that the private placement would add liquidity throughout 2021.

AirAsia will allocate the gross proceeds to support fuel hedging settlement, general working expenses, aircraft lease and maintenance payments, and fund AirAsia Digital business units, namely the AirAsia super app and BigPay financial technology platforms.