29 May 2009
Malaysian low-cost airline AirAsia s planning a MYR500 million ringgit (USD$143.1 million) rights offering as it expects debt levels to climb this year, its chief executive said on Friday.
AirAsia CEO Tony Fernandes said the airline has finalised the size of the planned issue at MYR500 million but it has not decided on the timing.
"(We are) still exploring," Fernandes said when asked if he expects the sale share to happen this year.
AirAsia, Southeast Asia's largest budget carrier with a market capitalisation of USD$848 million, had said it expects borrowings to swell by up to MYR2.1 billion this year as it takes delivery of 14 Airbus aircraft.
"In the context of MYR7 billion of debt and MYR27 billion of committed capex, we consider this level of leverage extreme and consider an equity issue a distinct possibility," said investment bank UBS in a note published after the airline's quarterly results.AirAsia on Thursday said first-quarter net profit jumped 26 percent from a year ago to MYR203.15 million, helped by