KUALA LUMPUR (July 7): AirAsia Bhd confirms that its 49%-owned associate company, PT Indonesia AirAsia, has received a letter from Indonesia’s Ministry of Transport that requires it to ensure a positive equity position by July 31.
“As this is a matter which has only been made known to us, we together with Indonesia AirAsia are currently studying the letter closely as well as [seeking] a meeting with the Ministry of Transport,” said the low cost carrier in a filing to Bursa Malaysia.
“The letter has no immediate effect on the operations of Indonesia and the airline shall at all times continue to operate within the ambit of Indonesian laws,” AirAsia (fundamental: 0.2; valuation: 1.4) added.
Last Friday, The Jakarta Post reported that 13 airlines, including IAA, had been given until July 31 to restructure their balance sheets in order to have positive shareholders’ fund.
Failing to do so, according to Indonesia's Law No 1/2009 on aviation, their operating permits would be suspended by the Transportation Ministry.
As at March 31, Indonesia AirAsia’s balance sheet as at March 31 shows that the low cost carrier had a shareholders fund deficit of 3.03 trillion rupiah (RM866 million) mainly due to the accumulated losses of 3.21 trillion rupiah.
AirAsia share price was unchanged at RM1.49 today, with a market capitalisation of RM4.23 billion.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)