Thursday 28 Mar 2024
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KUALA LUMPUR (Nov 15): AirAsia X Bhd (AAX) said on Monday (Nov 15) the budget airline's focus to raise new capital is necessary because the airline has not received any external financial support during the Covid-19 pandemic or any such time before.

As such, the airline must reset and rebuild a solid platform for a sustainable and viable future so that new investors will be prepared to inject new capital into the company, according to AAX.

"Our priority is to comprehensively restructure and recapitalise the airline so that it can operate again as one of the world's leading low-cost medium-haul operators.

"Our creditors, despite many being owed vast sums, voted overwhelmingly on Nov 12 to give us the opportunity to survive and recover stronger, as it is in their best interest that we do. Similarly, it is in the best interest of our passengers to allow us to fly again so that we are in a position to honour their travel credits with us.

"Put simply, the alternative is that everyone loses without any chance of recovery of what is owed if we are not successful in this restructuring," AAX said in a statement on Monday.

In October last year, the carrier proposed to reconstitute RM63.5 billion of its debts into an acknowledgement of indebtedness for a principal amount of up to RM200 million by shaving off 99.9% of its issued share capital, as well as a proposed share consolidation of every 10 existing shares in AAX into one share. The RM63.5 billion figure was reduced to RM33.65 billion after a proof of debt exercise conducted by AAX to determine and finalise the list of scheme creditors and the value of their scheme amount.

It also proposed a renounceable rights issue of new shares to raise gross proceeds of up to RM300 million from its existing shareholders, as well as a proposed issuance and allotment of new AAX shares to raise another RM200 million.

AAX's major shareholders, however, have not given any undertaking or commitment to the cash call so far, unlike at sister company AirAsia Group Bhd, which on Nov 11 saw shareholders approve its proposed cash call to raise more than RM1 billion for recapitalisation. AirAsia Group's two largest shareholders — Tan Sri Tony Fernandes and Datuk Kamarudin Meranun — have both committed to undertaking all of their entitlements under its redeemable convertible unsecured Islamic debt securities issuance, and are expected to fork out RM257.27 million for the purpose.

Fernandes and Kamarudin are also the two largest shareholders of AAX, which they both co-founded. Based on AAX's latest annual report published last month, its top five shareholders as at June 30, 2021 were Kamarudin with a direct 8.94% stake and an indirect 31.59%; Fernandes with a direct 2.69% stake and an indirect 31.59%; AAX deputy chairman Datuk Lim Kian Onn with an indirect interest of 4.24%; AAX chairman Tan Sri Rafidah Aziz with 175,000 shares directly held and 100,000 indirectly held; and AAX board member Tan Sri Asmat Kamaludin who has a direct stake of 297,400 shares and 40,000 indirect.

AAX, which has been loss-making since 2018, went into debt restructuring mode in August 2020, as its losses jumped amid international and interstate border closures that hit the aviation industry hard amid the pandemic outbreak.

On Monday's market close, AAX's share price settled unchanged at 7.5 sen, giving the company a market capitalisation of about RM311.11 million, after 67.02 million shares changed hands.

Edited ByChong Jin Hun & Tan Choe Choe
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