by NURUL SUHAIDI / pic by TMR FILE
AIRASIA X Bhd has decided to raise a smaller amount of RM166 million from its rights issue instead of the RM300 million it had earlier planned for its restructuring exercise.
The cash-strapped and loss-making low-cost carrier yesterday fixed the price issue for its one-for-one rights issue and a special issue at 28 sen per share to raise a total of RM166 million while it expects to raise RM50 million for a special issue now.
The price is at a discount to its market share price of 60 sen at close yesterday.
As part of its restructuring scheme, the company has previously obtained shareholders’ approval for a larger rights issue to raise to RM300 million and a special issue of RM200 million.
All approvals have been obtained for the fundraising, the company stated in its exchange filing.
AirAsia X CFO Andrew Littledale said the company had RM95 million in cash at the start of 2021 while its average monthly cash burn over the last 14 months was RM3 million.
“Even if borders are not open in the next few years, which will not be the case, we will be able to sit through any possibilities.
“A greater fundraising is not only unneeded at this time, but it will also be punitively dilutive, particularly for existing retail shareholders who may not be able to fund a larger rights issue at this tough time,” he stated in a release explaining the reduction in funds to be raised.
“We sharply narrowed our operating loss to RM12 million as we ramped up our cargo business post the successful restructuring vote by creditors in November last year.
“We expect to have seven planes fully operational by the end of this quarter with the current fleet of 11 wide-body A330’s all flying by the end of October 2022,” AirAsia X CEO Benyamin Ismail said adding the carrier has been flying three planes in the quarter ended Dec 31.
“We have used the downtime in passenger flying to ramp up cargo revenue and will continue to further build on it,” he added.
In this new quarter, the company stated it had solidified strategic cargo relationships with Teleport and Geodis, and are in various stages of discussions with more global logistics providers to support the implementation of its combination carrier strategy, which focuses on cargo as the primary revenue stream and passengers as a bonus.
AirAsia X is also in talks to lease at least four more planes in preparation for a full resumption of passenger flights when borders open, to take its fleet size to at least 15 A330s.