KUALA LUMPUR: AirAsia X Bhd (AAX) (fundamental: 0; valuation: 0.3) is suspending the trading of its shares today from 9am to 5pm, pending a “material announcement”, it told Bursa Malaysia in a filing yesterday.

No other reasons were given for the suspension. The Edge Financial Daily, quoting sources, reported yesterday that the long-haul affiliate of low-cost carrier AirAsia Bhd plans to raise RM500 million via a rights issue and a private placement to shore up its balance sheet. 

The daily said the proposed rights issue was expected to be discussed by the board and passed today, and that it would be carried out on the basis of one new share for every two existing shares to raise around RM400 million.

The proposed private placement, on the other hand, would involve some 10% of the issued and paid-up share capital of AAX to raise another RM100 million. In its fourth consecutive quarterly loss since the fourth quarter of financial year 2013 (4QFY13), AAX’s net loss for the third quarter ended Sept 30, 2014 (3QFY14), ballooned 84.8% to RM210.85 million from RM128.79 million in 2QFY14 due to higher operating expenditure, foreign exchange losses and finance costs.

The airline is due to announce its 4QFY14 financials next month.  Its counter closed down 1.5 sen at RM6.55 yesterday, giving it a market capitalisation of RM1.55 billion.

This article first appeared in The Edge Financial Daily, on January 30, 2015.