KUALA LUMPUR: AirAsia Group Bhd (AirAsia) is raising over RM1 billion via a renounceable rights issue with existing shareholders as part of an overall group fundraising strategy.
The rights issue entails the issuance of seven-year redeemable convertible unsecured Islamic debt securities (RCUIDS) with a nominal value of 75 sen each, plus free detachable warrants on the basis of two RCUIDS with one warrant for every six AAGB shares held.
In a statement today, the low-cost carrier said the exercise is expected to be completed in the fourth quarter this year.
The corporate exercise is in tandem with AirAsia's digital transformation entering the next phase, including the acquisition of Gojek Thailand's operations.
AirAsia stated that the exercise would enable the company to raise funds to support various segments of the company, including working capital and other operational costs incurred as a result of the global Covid-19 pandemic, with the remainder to be used to fund the growth of the carrier's various digital business units.
Group chief executive officer Tan Sri Tony Fernandes said fundraising is a critical component of AirAsia's recovery strategy.
"The timing is right, as vaccines are being rolled out aggressively in all of our key markets, alongside better education and testing," he said.
Fernandes said the exercise will provide a platform to seek a fresh funding injection from shareholders to maintain liquidity during the downtime in flying and fuel growth of the key non-airline digital businesses, ahead of the expected resumption of global air travel, in the third quarter of 2021 or first quarter of 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," he said.
According to Fernandes, AirAsia's Super App is valued at more than $1 billion, a strong testament to the carrier's strategy to become much more than just an airline but also a digital lifestyle company anchored on travel.
AirAsia has also well progressed in discussions to secure a number of other fundraising initiatives that will not only ensure a sustainable and viable business for the short-haul but also a stronger and more resilient operation for the future.