Tuesday, July 7, 2009

AirAsia placement to raise RM500mil

01 July 2009

Low-cost carrier hopes to complete exercise in two months

KUALA LUMPUR: AirAsia Bhd, which has announced its intention to do a 20% private placement, expects to raise about RM500mil from the exercise.

“The private placement is subject to approval from Bursa Malaysia. We hope to complete the exercise in two months.

“The idea is basically to try to raise around RM500mil to reduce our loans and have more cash,” chief executive officer Datuk Seri Tony Fernandes said on the sidelines of Invest Malaysia 2009 yesterday.

“There’s been a huge appetite for our equity. It’s always good to have cash, especially for an airline; hence we’ve decided to do a private placement,” he said.

Fernandes added the group would be working on the terms of the private placement.

“The first stage is to appoint bankers to see how best to do the exercise; whether it should be in two blocks of 10% each or a straight 20%,” he said.

Fernandes said its plan had been “warmly welcomed” and had received “very good feedback” although many people had been asking about AirAsia’s high gearing.

He said there was ample liquidity in the market and that it was a good environment to raise equity.

On the new measures announced by the Government, Fernandes said: “Today is a very big day for AirAsia. It’s what I’ve been asking for seven years and today we get a level playing field.”

“The Government has created a level playing field and, hopefully, this will prevent any excursion to hospital,” he joked.

Fernandes was admitted to a hospital recently after he fainted at the low-cost carrier terminal due to exhaustion.

Asked if the setting up of Ekuiti Nasional Bhd (Ekuinas) would help AirAsia, he said: “I think so. When we started seven years ago, we couldn’t get a cup of coffee from any bank for private equity.”

Fernandes said there was enormous talent in the country and there could be many more (like) AirAsia but lacked funding and hoped that Ekuinas would provide them support to grow.

“There’ll be mistakes but if they (Ekuinas) are too conservative in their approach, they will miss some fantastic opportunities,” he added.

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