AirAsia X fixes rights issue price at lower end of range at 28 sen apiece to raise RM116m
AAX also said a further RM50 million is expected to be raised from the proposed share subscription via subscription by a special purpose vehicle. (Photo by Mohd Suhaimi Mohamed Yusuf/The Edge)
KUALA LUMPUR (Feb 21): AirAsia X Bhd (AAX), the low-cost, long-haul affiliate of Capital A Bhd, has fixed the issue price of its one-for-one rights issue at 28 sen apiece, which will raise up to RM116 million for working capital.
The rights issue price of 28 sen represents a 32.7% discount to the theoretical ex-all price of the shares of 41.58 sen, calculated based on the five-day volume weighted average market price of the shares as at Feb 18 of 55.15 sen.
Based on the rights issue price, the proposed rights issue will raise up to RM116 million, which will be used for the airline's working capital requirements.
In a bourse filing on Monday (Feb 21), AAX said a further RM50 million is expected to be raised from the proposed share subscription via subscription by a special purpose vehicle.
The fundraising amounts are less than what it had intended to raise. In December 2020, the airline told Bursa Malaysia that it had intended to raise between RM100 million and RM300 million through the rights issue, and an issuance and allotment of new AAX shares to raise another RM200 million.
Explaining the reduction in funds to be raised, AAX chief financial officer Andrew Littledale said a larger fund raise is now not only unnecessary but will also be punitively dilutive particularly to existing retail shareholders, who may not be able to fund a bigger rights issue at this difficult time.
“At the beginning of 2021, we had RM95 million in cash. Our average cash burn for the last 14 months averaged RM3 million a month. We will be able to sit through any eventualities in the next couple of years even if borders do not open, which, however, will not be the case,” he said in a separate statement.
AAX chief executive officer Benyamin Ismail said the airline was able to reduce its operating loss to RM12 million as it expanded its cargo business following a successful restructuring by creditors in November last year.
“We expect to have seven planes fully operational by the end of this quarter with the current fleet of 11 wide-body Airbus A330s all flying by the end of October this year. Discussions are also being held for AAX to lease at least another four planes in preparation for a full resumption of passenger flights when borders open with a targeted fleet strength of at least 15 A330s.
“We have used the downtime in passenger flying to ramp up cargo revenue and will continue to further build on it. As recently announced, we have now cemented strategic cargo relationships with Teleport and Geodis in this new quarter, and we are in various stages of discussions with more global logistics providers to underpin the implementation of our combination carrier strategy, with cargo being the main revenue stream and passengers ancillary to add to it,” added Benyamin.
For the six months ended Dec 31, 2021, AAX reported a cumulative a net loss and revenue of RM161.08 million and RM218.58 million respectively.
The rights issue and share subscription are undertaken after the completion of a RM33.65 billion debt restructuring scheme to enable AAX to continue as a going concern. In December last year, it received scheme creditors' nod as well as a court sanction to proceed with the restructuring. Upon the completion of the exercise, AAX will be among the few airlines worldwide that have no gearing and a restructured cost base that is significantly below that of its competitors.
At Monday’s noon break, AAX shares rose half a sen or 0.8% to 63 sen, with 1.71 million shares changing hands. At 63 sen, its market capitalisation stood at RM259.26 million.
https://www.theedgemarkets.com/article/airasia-x-fixes-rights-issue-price-28-sen-apiece-raising-rm116m
AAX also said a further RM50 million is expected to be raised from the proposed share subscription via subscription by a special purpose vehicle. (Photo by Mohd Suhaimi Mohamed Yusuf/The Edge)
KUALA LUMPUR (Feb 21): AirAsia X Bhd (AAX), the low-cost, long-haul affiliate of Capital A Bhd, has fixed the issue price of its one-for-one rights issue at 28 sen apiece, which will raise up to RM116 million for working capital.
The rights issue price of 28 sen represents a 32.7% discount to the theoretical ex-all price of the shares of 41.58 sen, calculated based on the five-day volume weighted average market price of the shares as at Feb 18 of 55.15 sen.
Based on the rights issue price, the proposed rights issue will raise up to RM116 million, which will be used for the airline's working capital requirements.
In a bourse filing on Monday (Feb 21), AAX said a further RM50 million is expected to be raised from the proposed share subscription via subscription by a special purpose vehicle.
The fundraising amounts are less than what it had intended to raise. In December 2020, the airline told Bursa Malaysia that it had intended to raise between RM100 million and RM300 million through the rights issue, and an issuance and allotment of new AAX shares to raise another RM200 million.
Explaining the reduction in funds to be raised, AAX chief financial officer Andrew Littledale said a larger fund raise is now not only unnecessary but will also be punitively dilutive particularly to existing retail shareholders, who may not be able to fund a bigger rights issue at this difficult time.
“At the beginning of 2021, we had RM95 million in cash. Our average cash burn for the last 14 months averaged RM3 million a month. We will be able to sit through any eventualities in the next couple of years even if borders do not open, which, however, will not be the case,” he said in a separate statement.
AAX chief executive officer Benyamin Ismail said the airline was able to reduce its operating loss to RM12 million as it expanded its cargo business following a successful restructuring by creditors in November last year.
“We expect to have seven planes fully operational by the end of this quarter with the current fleet of 11 wide-body Airbus A330s all flying by the end of October this year. Discussions are also being held for AAX to lease at least another four planes in preparation for a full resumption of passenger flights when borders open with a targeted fleet strength of at least 15 A330s.
“We have used the downtime in passenger flying to ramp up cargo revenue and will continue to further build on it. As recently announced, we have now cemented strategic cargo relationships with Teleport and Geodis in this new quarter, and we are in various stages of discussions with more global logistics providers to underpin the implementation of our combination carrier strategy, with cargo being the main revenue stream and passengers ancillary to add to it,” added Benyamin.
For the six months ended Dec 31, 2021, AAX reported a cumulative a net loss and revenue of RM161.08 million and RM218.58 million respectively.
The rights issue and share subscription are undertaken after the completion of a RM33.65 billion debt restructuring scheme to enable AAX to continue as a going concern. In December last year, it received scheme creditors' nod as well as a court sanction to proceed with the restructuring. Upon the completion of the exercise, AAX will be among the few airlines worldwide that have no gearing and a restructured cost base that is significantly below that of its competitors.
At Monday’s noon break, AAX shares rose half a sen or 0.8% to 63 sen, with 1.71 million shares changing hands. At 63 sen, its market capitalisation stood at RM259.26 million.
https://www.theedgemarkets.com/article/airasia-x-fixes-rights-issue-price-28-sen-apiece-raising-rm116m
