AirAsia Group plans to raise cash via private placement in order to address interim cash flow requirements.
On January 21, 2021, AirAsia Group proposed to issue up to 668,4 million shares or 20% of its total number of issued shares to raise around RM454.41 million ($113 million) via private placement in order to address near-term cash flow requirements.
“The proposed Private Placement is expected to raise gross proceeds of up to approximately RM454.51 million,” the AirAsia Group statement read.
However, the company indicated that the new round of funding would only cover short-term cash requirements. “The Proposed Private Placement will not fully address the Group’s current financial concerns as the estimated gross proceeds of up to approximately RM454.51 million would not be sufficient to meet its long-term cash flow requirements,” indicated the low-cost carrier group.
AirAsia Group noted that the funds will be used for aircraft lease and maintenance payments, fuel hedging settlements, digital technology development costs, marketing expenses, product and market expansion costs.
In November 2020, AirAsia Group reported a net loss of RM851.78 ($210.4 million) in Q3 2020.
As the group is battling the COVID-19 pandemic, Thai AirAsia, a joint venture of AirAsia and Thailand’s Asia Aviation, said that it would put 75% of its staff on unpaid leave beginning from February 2021.