Thursday 28 Mar 2024
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KUALA LUMPUR (Dec 1): AirAsia Bhd’s RM1 billion capital injection from its founders Datuk Kamarudin Meranun and Tan Sri Tony Fernandes through Tune Live Sdn Bhd is now unconditional after receiving Bank Negara Malaysia’s approval.

In a statement today, AirAsia said its subscription agreement with Tune Live has become unconditional pursuant to Tune Live receiving its approval from the central bank for its partial offshore funding.

“The funding relates to the proposed issuance and allotment of 559 million new ordinary shares in AirAsia at RM1.80 each,” it said, adding that BNM’s approval was the final condition precedent for the partial offshore funding.

AirAsia said payment for the subscription shares, which would constitute 16.7% of the group’s enlarged share capital, will be made within 60 days, or any other date as the parties may agree, with its issuance and allotment within eight market days after the payment.

“The new shares issued pursuant to this agreement will rank pari passu to all other existing shares in issue,” it said.

AirAsia had on April 1 entered into a conditional subscription agreement with Tune Live, an investment holding company owned by Kamarudin, who is also the group’s executive chairman, and Fernandes, who is AirAsia Group chief executive officer, for the proposed share issuance.

Upon the completion of the exercise, AirAsia will receive cash proceeds of about RM1.01 billion.

“The cash proceeds are to be utilised by AirAsia principally for the pre-payment and repayment of borrowings, financing of aircraft, engines and parts, pre-delivery payments of aircraft as well as for general corporate and working capital,” the group said.

AirAsia expects the exercise to contribute positively to its financial position through a more strengthened balance sheet and increased financing flexibility.

Fernandes previously said that the capital injection was a clear indication of his and Kamarudin’s commitment to AirAsia.

“We have received overwhelming support from shareholders. We are doing it because we want to show our commitment to AirAsia.

“Some people have asked us if we are retiring, etc. So one way to show our commitment is to do it financially, put our money where our mouth is,” he was reported as saying.

At 4:09pm today, AirAsia’s share price was trading at RM2.72, down four sen or 1.45%, with a market capitalisation of RM7.6 billion.

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