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AIRASIA (5099)  AIRASIA GROUP BHD’s successful private share placement

PETALING JAYA: Low-cost carrier AirAsia Group Bhd has concluded its private share placement exercise with the completion of a second tranche, where another 100.36 million new shares have been issued.

In a statement yesterday, AirAsia Group said the tranche represented approximately 3% of its total issued shares at an issue price of 86.5 sen each.

“This follows the initial tranche of 11.07% or 369.85 million shares issued on Feb 19 that saw the emergence of Hong Kong-based investor Dr Stanley Choi Chiu Fai (pic below) as a substantial shareholder after upgrading his share position to 8.96% from less than 5% previously.”

In total, both tranches delivered 470.21 million new shares issued under the private placement exercise, representing 14.07% of AirAsia Group’s total issued shares and raised a total of RM336.46mil.

“The shareholders of AirAsia Group and Bursa Malaysia Securities Bhd had earlier approved for AirAsia Group to undertake the private placement exercise of up to 20% of AirAsia Group’s total issued shares.

“The private share placement exercise forms part of AirAsia Group’s larger plans to raise up to RM2bil to RM2.5bil via a combination of debt and equity to finance, amongst others, the working capital requirements of the group, ” it said.

AirAsia Group said the key investors that anchored the private placement exercise included, amongst others, Choi; TPG Capital founder and chairman David Bonderman, together with several TGP partners investing in their personal capacity; Canada-based investment advisory firm Aimia Inc; and other local and foreign institutional funds.

Elaborating on the investors, AirAsia Group said Choi is the chairman of Head & Shoulders Financial Group, as well as the chairman and executive director of International Entertainment Corp, a company listed on the main board of Hong Kong Stock Exchange.

Separately, it said TPG Capital is a global investment firm headquartered in San Francisco, California and Fort Worth, Texas with approximately US$85bil (RM348bil) in assets under management and 14 offices around the world.

The low-cost carrier said Bonderman is also part-owner of the Boston Celtics and co-founder/ owner of the Seattle Kraken.

“Bonderman was a long-standing chairman of Ryanair for over 20 years until last year. His other TPG Asia Partners investing in a personal capacity are Tim Dattels, Ganen Sarbananthan and Zubin Irani.”

AirAsia Group added that Aimia Inc is a holding company with a focus on long-term investments in public and private companies, on a global basis, through controlling or minority stakes.

The company operates through its wholly-owned subsidiary Mittleman Investment Management LLC and owns a diversified portfolio of valuable investments.

This includes a 48.9% equity stake in PLM Premier, S.A.P.I. de C.V. (PLM), owner and operator of Club Premier, the coalition loyalty program in Mexico that operates the Aeromexico Frequent Flyer program, a 49.3% equity stake in Kognitiv, a B2B technology growth company enabling collaborative commerce, a 10.85% stake in Clear Media Limited (100.HK), one of the largest outdoor advertising firms in China, as well as minority stakes in a portfolio of public company securities.

In the same statement, AirAsia Group chief executive officer Tan Sri Tony Fernandes said the successful private share placement and overwhelming response from renowned local and foreign investors were clear testaments to the low-cost carrier’s strong fundamentals and tremendous future potential, especially with its pivot into digital and data-driven businesses.

“We are thrilled by the investors’ confidence in our turnaround plans and this proves our capabilities to raise funds from both institutional and private strategic investors in the capital market, both locally and abroad. “We would like to thank the investors who have made this private share placement a huge success and we look forward to forging a long-term relationship with them.”

Fernandes added that the placement forms a significant part of AirAsia Group’s overall fundraising exercise to ensure liquidity throughout 2021.“Of the gross total proceeds, AirAsia will allocate funds to support fuel hedging settlement, general working expenses, aircraft lease and maintenance payments and fund AirAsia digital business units, namely the AirAsia super app and BigPay fintech platforms.”

Additionally, Fernandes said the private placement is a major vote of confidence towards the recovery of the aviation and tourism industry that had been severely battered by the Covid-19 pandemic.

“At AirAsia, we have robust plans that will allow us to survive on domestic services until international borders reopen.“We are confident that the rollout of vaccination programmes in our key markets that are set to immunise 40% to 50% of the population by the third quarter of this year, coupled with better education and testing, alongside strong support for leisure travel bubbles among low risk countries and territories, and the push for global digital health passports are steadily paving the way for a major travel reboot in the near future.”

Fernandes said the group has plans to launch a ride hailing service in coming months, as well as an air taxi service and Malaysia’s first drone delivery service in the “not too distant future.”

He said this was all a part of the company’s strategy to continue to diversify and rebuild, ahead of an expected huge surge in travel demand once international travel restrictions are lifted.

“With this announcement, I am assured we not only have the right foundations and platforms in place to recover faster than many of our competitors, but also will return stronger than ever, ” Fernandes said.


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