AirAsia raises RM505mil from placement

16 September 2009

PETALING JAYA: AirAsia Bhd, which was suspended from trading yesterday, has raised as much as RM505.4mil in a private placement to pare down its debts.

In a filing with Bursa Malaysia, the carrier said it had completed its book-building exercise for the offering of 380 million new AirAsia shares representing 16% of its issued and paid-up capital as at Sept 10.

Based on the record of depositors of the airline as at Sept 10, the foreign shareholding level of AirAsia amounted to 46.10%.

“The private placement was oversubscribed with strong demand from foreign institutional investors.

“The final allocation and the size of the private placement was aimed to achieve a post-placement foreign ownership level of 45%, in line with AirAsia’s articles of association,” it said.

The issue price, which was fixed at RM1.33, represents a discount of 6.71% to the five-day volume weighted average market price of AirAsia shares up to and including Sept 14 of RM1.4257 per AirAsia share.

CIMB Investment Bank Bhd and Credit Suisse (Singapore) Ltd are the joint-placement agents for the exercise.

Earlier, group chief executive officer Datuk Kamarudin Meranun was quoted by Bloomberg as saying AirAsia could offer additional 75 million shares in the private placement.

Chief executive officer Datuk Seri Tony Fernandes, who is currently abroad, could not be reached for comment.

Long-haul sister carrier AirAsia X’s Oakland Raiders aircraft livery made a debut at the Oakland International Airport on Monday. The carrier had earlier signed a sponsorship deal with the National Football League’s Oakland Raiders.

ECM Libra Investment Research, which maintained a “buy” call on AirAsia, said it was “positive” on the private placement, which would help increase liquidity position of AirAsia and lower its net gearing ratio.

“Based on management guidance, post-private placement, net gearing may decrease to 2.5 times from 3.71 times, representing a drop of 32.6%,” it said.

Kenanga Research said the private placement would be a relief for AirAsia’a balance sheet, as it would increase the latter’s cash position in helping to partly fund new aircraft deliveries and some working capital.