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AirAsia secures US$72m loan from Sabah Development Bank

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Malaysia's AirAsia Group has approved and disbursed a US$72 million loan from Sabah Development Bank to its units as part of the group's fundraising efforts, the budget airline said in a bourse filing on Friday.

[KUALA LUMPUR] Malaysia's AirAsia Group has approved and disbursed a US$72 million loan from Sabah Development Bank to its units as part of the group's fundraising efforts, the budget airline said in a bourse filing on Friday.

The airline said the loan was not backed by a government guarantee, which the group has been seeking for a portion of the loans it hopes to secure.

AirAsia has been looking to raise as much as RM2.5 billion (S$815.8 million) by the end of the year, RM1.5 billion of which could be in bank loans.

AirAsia said the loan was to fund specific development projects as agreed by the airline and the bank, including RM170 million to establish and operate a digital food supply chain and cold chain facilities in the state of Sabah.

The rest will part-finance a project to turn the capital city airport into an international hub for AirAsia's operations, enhance e-commerce platforms and marketability of Sabah products and promote tourism destinations on AirAsia's platform.

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"The main purpose of the loan is to enhance logistics in Sabah by increasing its supply chain and connectivity, creating over 100,000 new jobs in the process," it said.

REUTERS

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