AIRASIA NEEDS TO ISSUE NEW SHARES TO SURVIVE
A cash call is necessary for AirAsia Group Bhd to remain afloat as banks are unlikely to keep lending without its shareholders supporting any capital-raising exercise, analysts told Ayisy Yusof of New Straits Times of Malaysia on Saturday, July 11, 2020.
Still, AirAsia might not raise up to RM1.4 billion capital from a rights issue all at once, according to analysts who attended AirAsia's briefing on the group's plans to address its cash flow requirements in near to medium term on Thursday. AirAsia Malaysia has few assets left after selling its planes to lessors.
The AirAsia group, they estimated, needed a total of RM3 billion capital to remain afloat. Public Investment Bank Bhd (PublicInvest) analyst Nur Farah Syifaa' Mohamad Fu'ad said AirAsia would continue to operate in the current challenging period.
CSG CIMB analyst Raymond Yap said there may be several strategic shareholders waiting, in addition to South Korea's conglomerate SK Corp, for the potential private placement. "Taking AirAsia's assurances at face value, we are reasonably confident that the carrier will survive Covid-19, as the new RM1 billion loan to its local operation (AirAsia Malaysia), possible new loans to Indonesia AirAsia and the Philippines AirAsia, and potential RM1.4 billion new equity issue by AirAsia Group, will bring the total capital raising close to the RM3 billion, we estimate, needed to keep afloat," he said.