AirAsia Group has completed its private share placement exercise with the issuance of a second tranche of 100.37 million new shares at an issue price of RM0.865 each – which equates to about 3% of the company’s total issued shares. The initial tranche comprised 369.85 million shares (about 11.07%) closed on Feb 19, which welcomed new investor Dr Stanley Choi Chiu Fai - Chairman of Head & Shoulders Financial Group – as a substantial shareholder as his stake climbed to 8.96% from <5% previously.
Together, both tranches delivered 470.21 million new shares issued under the private placement exercise, representing 14.07 per cent of AirAsia Group’s total issued shares and raised a total of RM336.46 million (approximately US$81.64 million).
The placement forms part of AirAsia’s plan to raise up to RM2.0 billion – RM2.5 billion via a combination of debt and equity to finance, approximately US$600 million.
Other investors that anchored the private placement include, among others, are: David Bonderman – Founder and Chairman of TPG Capital – and several Partners at TPG investing that are investing in a personal capacity; Aimia, which is a holding company that operates an investment advisory business through its wholly-owned subsidiary Mittleman Investment Management; as well as other local and foreign institutional funds.
CEO of airasia group, Tony Fernandes referred to the “overwhelming response” from “renowned local and foreign investors” for the success of the private share placement, which he said: “were clear testaments to airasia's strong fundamentals and our tremendous future potential, especially with our pivot into digital and data-driven businesses”. He further commented that the placement formed a significant part of the company’s overall fundraising exercise to “ensure liquidity throughout 2021”.
AirAsia will allocate funds from the gross total 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 fintech platforms.
Fernandes added: “On a wider scale, the private placement is a major vote of confidence towards the recovery of the aviation and tourism industry that have been severely battered by the Covid-19 pandemic. At airasia, we have robust plans that will allow us to survive on domestic services until international borders reopen. We are confident that the rollout of vaccination programmes in our key markets that are set to immunise 40%- 50% of the populations 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.”
Fernandes also highlighted future plans for the company that include a ride hailing service, an air taxi service and Malaysia's first drone delivery service.
“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 also will return stronger than ever,” he said.