AirAsia X to raise US$123m in rights issue, new shares

[KUALA LUMPUR] Malaysia's AirAsia X (AAX) said on Monday it proposed raising US$123 million through a rights issue to existing shareholders and a share subscription for new investors.

The airline, the long haul arm of AirAsia Group, said in a stock exchange filing that it intends to raise up to RM300 million (S$98.6 million) through the rights issue.

It also proposed issuing and allotting new shares through subscription by a special purpose vehicle, of up to RM200 million shares, and an option for the vehicle to subscribe for additional 15 per cent of the enlarged total number of AAX shares.

The fundraising will be undertaken after the completion of a S$15.3 billion of debt restructuring scheme proposed in October to enable AAX to continue as a going concern, for which the airline is seeking the approval of its creditors.

AAX said it is now seeking to further reduce its share capital by 99.9 per cent, shrinking the issued share capital to RM1.53 million. It previously proposed a reduction by 90 per cent.

The credit arising from the proposed share capital reduction will be used to offset part of its accumulated losses, it said.

"Shareholders funds after the capital reduction remains negative but the consolidation of shares post-capital reduction will provide a platform to seek fresh funding from existing shareholders," the airline said in a statement.

Several creditors have intervened in the restructuring proceedings, and the airline said it will continue to engage with them to hopefully allay their concerns.

"The debt restructuring scheme is a prerequisite for the recapitalisation of the Company...and a comprehensive reset of the airline is required to provide a platform to rebuild and a vehicle attractive enough for investors to invest in," it said.

The alternative to the scheme is a liquidation of the airline without any returns to creditors, it said.

REUTERS