AirAsia Group, a Malaysia-based investment holding company, secured a $72 million loan from Sabah Development Bank Berhad and disbursed it to the group’s units.
On October 23, 2020, AirAsia Group released a filing in which it reported completing a payout of a $72 million worth loan to its subsidiaries “as a part of the group’s fundraising efforts”. The company announced that the loan was granted by Sabah Development Bank Berhad. However, it was not backed by the country’s government.
“The main purpose of the loan is to enhance logistics in Sabah by increasing its supply chain and connectivity, creating over 100,000 new jobs in the process,“ stated AirAsia Group in the filing.
The group appointed a $41 million for establishing and operating a digital food supply chain and cold chain facilities in Sabah, the Northern state of Malaysia. AirAsia also stated that the rest part of the loan, around $31 million, would be used to consolidate the development of other projects as per agreement with the Sabah Development Bank.
In addition, part of the $72 million loan would be also used to partly-finance the conversion of Kota Kinabalu International Airport (BKI) into AirAsia’s international operations hub.
Earlier in September 2020, AirAsia Group announced that in order to survive a business slump deepened by the COVID-19 pandemic, it planned to raise up to $600 million by the end of 2020. Around $360 million the company considered to borrow in banks, while the other part should be injected from local and foreign investors, including strategic partners and private equity firms.