AirAsia X is out with a proposal to raise up to RM50 million (approx. US$10.9 million) in new capital via the placement of shares with two institutional investors.
The airline said that the timing of the placement was strategic given that between 2020-2022 it has implemented a number of measures to address the company’s financial concerns in the wake of the pandemic including its debt restructuring scheme and an array of corporate restructuring and cost containment exercises, and has also now registered two consecutive quarters of profit for the financial periods ended 30 September 2022 and 31 December 2022.
“On the back of this momentum, the Proposed Placement would be a timely and strategic means for the Company to raise funds which will primarily be used for the reactivation and maintenance of the Company’s fleet,” said AirAsia X.
This will be AirAsia’s first equity fundraising exercise since 2015. The proceeds from the Proposed Placement would serve as an “interim fundraising measure to bolster its short term working capital requirements as the Company continues to recover and grow its operations in this post-pandemic era”.
Benyamin Ismail, chief executive of AirAsia X said: “We are pleased to have embarked on this new era post-COVID-19, in which we witness the return of confidence in the aviation industry, which has shown clear evidence of a rebound following three long years of stall. With this Proposed Placement, all indicators signal the Company is moving into the right direction and will have a much stronger ground for its continued and concerted efforts to revitalise its business, as the industry’s recovery takes place in the near future.”
AirAsia X is currently flying 16 medium-haul destinations including the recently launched Chengdu (Tianfu) and three short-haul routes from Kuala Lumpur to Kota Kinabalu, Bali - Denpasar and Bangkok, with a total of 83 flights weekly.