KUALA LUMPUR (March 17): AirAsia Group Bhd has completed its private share placement exercise, with the culmination of the second tranche today that resulted in an additional 100.37 million new ordinary shares issued, representing approximately 3% of the company’s total issued shares at an issue price of 86.5 sen each.
In a statement this morning, the low-cost carrier said this follows the initial tranche of 11.07% or 369.85 million shares issued at 67.5 sen on Feb 19 that saw the emergence of Hong Kong-based investor Dr Stanley Choi Chiu Fai as a substantial shareholder after upgrading his share position to 8.96% from less than 5% previously.
AirAsia said in total, both tranches delivered 470.21 million new shares issued under the private placement exercise, representing 14.07% of its issued shares and raising a total of RM336.46 million.
It also said the private share placement exercise forms part of AirAsia’s larger plans to raise up to RM2 billion to RM2.5 billion via a combination of debt and equity to finance, among others, working capital requirements of the group.
According to AirAsia, the key investors that anchored the private placement exercise included Head and Shoulders Financial Group chairman, International Entertainment Corp chairman and executive director Stanley Choi, followed by TPG Capital founder and chairman David Bonderman and several partners at TPG investing in their personal capacity, as well as Aimia Inc, a holding company with a focus on long-term investments in public and private companies.
AirAsia group chief executive officer (CEO) Tony Fernandes said the successful private share placement and the overwhelming response that it received from local and foreign investors were clear testaments to the carrier’s strong fundamentals and its tremendous future potential, especially with its pivot into digital and data-driven businesses.
He said he was thrilled by investors’ confidence in AirAsia’s turnaround plans, and this proves its capabilities to raise funds from both institutional and private strategic investors in the capital market, both locally and abroad.
“We would like to thank the investors who have made this private share placement a huge success, and we look forward to forging a long-term relationship with them,” he said.
He said the placement forms a significant part of the group’s overall fundraising exercise to ensure liquidity throughout 2021.
Of the gross total proceeds, he said, AirAsia will allocate funds to support fuel hedging settlement, general working expenses, aircraft lease and maintenance payments, and fund AirAsia Digital’s business units, namely the AirAsia super app and BigPay fintech platforms.
On a wider scale, he said, the private placement was a major vote of confidence towards the recovery of the aviation and tourism industry that had been severely battered by the Covid-19 pandemic.
He also said the group had robust plans that will allow it to survive on domestic services until international borders reopen.
“We are confident that the roll-out of vaccination programmes in our key markets that are set to immunise 40%- 50% of the population by the third quarter of this year, coupled with better education and testing, alongside strong support for leisure travel bubbles among low-risk countries and territories, and the push for global digital health passports, are steadily paving the way for a major travel reboot in the near future,” he said.
He also noted that great value, choice and innovation are three key cornerstones of the AirAsia brand, and there are many more products and innovations in the pipeline as the AirAsia super app evolves.
He said the group had plans to launch a ride-hailing service in the coming months, and in the not-too-distant future an air taxi service and Malaysia’s first drone delivery service as the company continues to diversify and rebuild ahead of an expected huge surge in travel demand in the not-too-distant future once international travel restrictions are lifted.
“With this announcement, I am assured we not only have the right foundations and platforms in place to recover faster than many of our competitors, but [we] also will return stronger than ever,” he said.
At 10.41am today, AirAsia had fallen one sen or 0.88% to RM1.13, valuing the group at RM4.23 billion.
Source: The Edge