KUALA LUMPUR (March 11): Capital A Bhd (formerly known as AirAsia Group Bhd) fell as much as 4.5 sen or 6.82% to 61.5 sen on Friday (March 11) morning, after the company said it is unable to proceed with the RM500 million club facility under Danajamin Nasional Bhd’s Prihatin Guarantee Scheme.
At 10.53am, the counter pared some losses at 62.5 sen, still down 3.5 sen or 5.3%.
The counter, which was among the most actively traded stocks, saw 15.05 million shares traded.
Over the past one year, the counter has fallen 45.18%.
MIDF Research said in a note on Friday that even though the plan to take out the loan has fallen through, it believed that Capital A has sufficient liquidity to last through the financial year ending Dec 31, 2022 (FY22) assuming the monthly operating cash burn stays within RM62 million to RM70 million.
According to the research house, the group’s cash holding stood at RM1.26 billion as at end-FY21 (end-FY20: RM533.3 million) after going through rounds of fundraising exercises including: RM336.5 million raised via private placement, RM974.5 million raised via rights issue, a US$150 million/RM628.1 million foreign loan (only US$100 million/RM418.8 million had been withdrawn), and a US$100 million/RM418.8 million convertible loan from SK Group for BigPay.
“The management is also targeting to secure another US$225 million/RM942.1 million) loan from foreign lenders in 1HFY22,” it said.
MIDF also maintained its "neutral" call on Capital A with an unchanged target price of 61 sen.
“Our forward losses estimate remains unchanged. We shall expect to see its aviation business gradually pick up in the coming quarters following the border reopening,” it said.
According to the research house, in the pre-pandemic era, its operations in Malaysia had contributed about 80% of its earnings whereby almost half of the passengers carried were for international routes.
“However, we remain cautious as several of their key ASEAN markets have yet to fully reopen their borders. In addition, the rising jet fuel prices had prompted airlines including AirAsia to reintroduce fuel surcharges, making the fares relatively pricier,” it said.