The AirAsia Group announced a proposed renounceable rights issue to its existing shareholders, that is set to raise up to RM1 billion ($238.6 million) as part of the carrier’s recovery strategy and focus on digital transformation.
According to a statement from the airline, the Proposed Rights Issue entails the issuance of 7-year Redeemable Convertible Unsecured Islamic Debt Securities (“RCUIDS”) with a nominal value of RM0.75 each ($0.18), plus free detachable warrants on the basis of 2 RCUIDS with 1 warrant for every 6 AAGB shares held.
This new capital will fund various segments of the group’s ventures, including working capital, operational costs as well as the growth of AirAsia’s digital business units.
“Fundraising is a critical component of our recovery strategy,” said CEO of AirAsia Group Tan Sri Tony Fernandes. “The timing is right, as vaccines are being rolled out aggressively in all of our key markets, alongside better education and testing.”
Fernandes is optimistic that this fundraising will provide AirAsia with a capital injection that will allow the further growth of “key non-airline digital businesses” as well as healthy liquidity levels ahead of the resumption of air travel projected in Q3 2021/Q1 2022.
“While the airline will continue to underpin all operations, over the past 18 months, our digital transformation strategy has been gaining strong momentum with significant improvements across all key metrics for our airasia Super App, logistics and e-commerce venture Teleport and our for BigPay fintech business,” added Fernandes. “Last week our Super App was estimated to be valued at over USD 1 billion which is a strong testament to the strategy we have put in place to become much more than just an airline – now a digital lifestyle company anchored on travel.”
The Proposed Rights Issue is expected to be completed in the 4th quarter of 2021.