Danajamin to guarantee RM500m AirAsia loan

by PRIYA VASU / pic by MUHD AMIN NAHARUL

DANAJAMIN Nasional Bhd will guarantee 80% of the RM500 million loan AirAsia Group Bhd intends to take under the Danajamin Prihatin Guarantee Scheme which is part of government’s economic stimulus package following the unprecedented outbreak of Covid-19 pandemic.

In a statement yesterday, the low-cost carrier noted that the loan has been approved by AirAsia’s lenders under a club deal term financing (club facility), with the aforementioned guarantee to be provided by Danajamin via Syarikat Jaminan Pembiayaan Perniagaan (SJPP), a wholly-owned entity of the Finance Ministry.

“The guarantee from the Malaysia government via Danajamin/ SJPP is a strong signal of support for AirAsia as the group gears up to ensure it is in a robust position to once again serve the nation and the communities it operates to, playing a key role in rebuilding the economy, as the country emerges from the Covid-19 pandemic,” AirAsia noted in the statement.

It added that the financing under the club facility is earmarked for working capital purposes, which will support staff costs and key operating expenses such as aircraft maintenance as AirAsia prepares to ramp up its operations leading up to the re-opening of interstate and international borders in the near future.

“AirAsia has been a major contributor to the Malaysian economy by providing connectivity to facilitate tourism, trade and investment activities. We have also been pivotal in generating a significant number of job opportunities, and empowering local small and medium enterprises, especially through our digital ventures.

“This approval from the government is a strong endorsement of the group’s ability to recover fast and provides a welcome boost to our overall fundraising strategy as we prepare to return to the skies in all of our key markets,” said AirAsia’s executive chairman Datuk Kamarudin Meranun.

He added that the airline will be able to rebound quickly as more countries in the region continue to discuss and implement travel bubbles and to gradually reopen international borders.

Malaysia’s adult vaccination rate is close to 90%, and domestic interstate movements will be allowed once the 90% threshold is achieved.

“The Langkawi travel bubble has been a huge success with overwhelming demand since we launched up to 90 services a week from Sept 16,” Kamarudin added.

AirAsia also sees positive development in countries it operates in — Thailand, Indonesia and the Philippines — as services have gradually started to resume.

AirAsia shares closed one sen lower at RM1.12 yesterday.