[ad_1]
KUALA LUMPUR (Dec 15): AirAsia X Bhd (AAX) share price fell around 10% in morning trading in Bursa Malaysia today after the long-haul low-cost carrier announced yesterday, among others, a proposal for the issuance of new share rights and a review of a plan to reduce the company’s issued share capital.
At 9:01 am today, AAX was down one sen to 9.5 sen.
At 9.5 sen, AAX had a market value of approximately RM394.25 million.
AAX saw some 25 million shares traded.
Yesterday, AAX said in a presentation to Bursa that it had proposed to undertake the issuance of waivable rights to new shares in AAX to raise gross proceeds of up to RM300 million.
AAX also announced its proposal to issue and allot new AAX shares valued at up to RM200 million for subscription, among others, for a special purpose vehicle (SPV) incorporated by Datuk Lim Kian Onn.
Lim is the vice president of AAX.
In a separate filing, AAX said the company had proposed to revise the planned reduction of 90% of its issued share capital to 99.9%.
“As a consequence, the proposed share capital reduction will entail a reduction of the company’s issued share capital of approximately RM 1.53 billion (from RM 1.53 billion to RM 1.53 million). RM 1.53 billion will be used to offset accumulated losses from AAX, “the company said.
Today, the MIDF Amanah Investment Bank Bhd research team wrote in a note that AAX’s bold proposals for fundraising and an amendment to its planned equity reduction exercise are exactly the kind of potent “cure” for the The company’s current situation as the aviation industry faces the impact of restricted movement policies driven by the global Covid-19 pandemic to curb the outbreak.
The investigation team said MIDF believes that extraordinary situations require extraordinary measures.
The research team kept its target price (TP) for AAX shares at five sen.
“[Its share] the price has dropped significantly; but [we] keep ‘sell’. The airline industry is expected to continue to be adversely affected by continued development caused [by] the Covid-19 pandemic, and we reiterate our view that the passengers carried are destined for a temporary decline during the virus outbreak, and a prolonged recovery of the industry is not an exaggeration.
“The operating environment is further compounded by the financial dilemma AAX currently faces.
“We believe that the price appreciation [of AAX shares] it is premature, fueled by the market euphoria around vaccine news, ”the research team said.
Meanwhile, Public Investment Bank Bhd maintained its “low yield” call for AAX shares with an unchanged TP of one sen, pending further details on the basis of ownership and the issue price of the issue. rights, his analyst Nur Farah Syifaa ‘Mohamad Fu’ad wrote in a note today.
[ad_2]
