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KUALA LUMPUR (March 17): AirAsia Group Bhd has completed its private placement exercise, with the completion of the second tranche today that resulted in the issuance of 100.37 million additional new common shares, representing approximately 3 % of the total issued shares of the company 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 February 19 that saw the rise of Hong Kong-based investor Dr. Stanley Choi Chiu Fai as a substantial shareholder after improving his position in shares to 8.96% from less than 5% previously.
AirAsia said that in total, both tranches delivered 470.21 million new shares issued under the private placement exercise, representing 14.07% of its issued shares and raised a total of RM336.46 million.
He also said that the private equity placement exercise is part of AirAsia Group’s broader plans to raise between RM2 billion and RM2.5 billion through a combination of debt and equity to finance, among others, the requirements of group working capital.
According to AirAsia, key investors who supported the private placement exercise include Head and Shoulders Financial Group Chairman, International Entertainment Corp Chairman and CEO Stanley Choi, TPG Capital Founder and Chairman David Bonderman, and various partners. of TPG who invest on a personal basis, and a holding company with a focus on long-term investments in public and private companies Aimia Inc.
AirAsia Group Chief Executive Officer Tony Fernandes said the successful private equity placement and overwhelming response it received from local and foreign investors were a clear testament to the airline’s strong fundamentals and its tremendous future potential, especially with its shift towards digital and data-driven businesses. .
He said he was excited by investor confidence in AirAsia’s restructuring plans and this demonstrates its ability to raise funds from institutional and private strategic investors in the capital market, both domestically and abroad.
“We would like to thank the investors who have made this private equity placement a great success and we look forward to forging a long-term relationship with them,” he said.
He said the placement forms an important part of the group’s overall fundraising exercise to ensure liquidity throughout 2021.
From the total gross proceeds, he said, AirAsia will allocate funds to support the fuel coverage settlement, work overhead, aircraft leasing and maintenance payments and will fund AirAsia Digital’s business units, namely the super app. AirAsia and BigPay fintech platforms.
On a broader scale, he said, the private placement is a huge vote of confidence towards the recovery of the aviation and tourism industry that has been severely hit by the Covid-19 pandemic.
He also said the group has solid plans that will allow it to survive on domestic services until international borders are reopened.
“We are confident that the implementation of vaccination programs in our key markets, which are set to immunize between 40% and 50% of the population by the third quarter of this year, along with better education and testing, along with a strong support for leisure travel in low-risk countries and territories, and the push for global digital health passports are constantly paving the way for a major travel restart 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 works as the AirAsia super app evolves.
He said the group has plans to launch a passenger transport service in the coming months, and in the not too distant future, also an air taxi service and Malaysia’s first drone delivery service as the company continues to diversify. and rebuilding itself, before a huge expectation. increased travel demand in the not too distant future, once international travel restrictions are lifted.
“With this announcement, I am confident that not only do we have the right foundations and platforms to recover faster than many of our competitors, but that we will also come back stronger than ever,” he said.
At 10.41 am, AirAsia fell 1 sen or 0.88% to RM1.13, valuing the group at RM4.23 billion.
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