AirAsia to Complete RM974.5 Million Rights Issue

• Digital businesses accelerate
• Airline recovery well underway 
• Fundraising strategy on track to provide sufficient liquidity through 2022

KUALA LUMPUR, 29 December 2021 - AirAsia Group Berhad (AAGB) today announces it will complete its renounceable rights issue to its existing shareholders upon listing of the RCUIDS and Warrants on Friday, 31 December 2021, successfully raising RM 974.5 million and providing a strong injection to support the overall Group fundraising strategy.

AirAsia Group CEO, Tony Fernandes said: “After the most challenging two years in commercial aviation history, the end is finally within reach. We have survived the pandemic. We have restructured, relaunched and are now in a stronger position to recover faster. 

“We have used the downtime in flying to review every aspect of our airline operations with a strict focus on cost containment and implementing an optimal network and fleet strategy to put in place a solid platform to return to the skies leaner and stronger than ever in all key markets. 

“We have also transformed into a digital travel and lifestyle services group which isn’t solely reliant on airfares alone, providing a more robust and resilient model for the future. Asean is where we have our strongest foothold with access to over 700 million people and no other brand delivers the breadth of services we do now. Over the past 18 months, we have launched many new business ventures to meet consumer demand in the burgeoning digital economy. AAGB is now an investment company with a portfolio of synergistic travel and lifestyle businesses that leverage technology to deliver the best value at the lowest cost, supported by strong data and one of Asia's leading brands that remains committed to serving the underserved in all that it does.

“Earlier this year our super app achieved unicorn status in under two years after it was valued at over US$1 billion by Credit Suisse. Our fintech venture BigPay raised up to US$100 million in financing from SK Group as it continues to transform fintech interconnectivity in the region by democratising financial services, providing accessibility and inclusivity, serving the underserved just like the airline does, including SMEs and start up businesses. BigPay is now focusing on securing a bank lending licence to expand its low rate offerings.

“The Rights Issue announced today is a key component of our overall fundraising strategy supporting a strong rebound in air travel across Asean in 2022. We are gradually resuming flights in all of our key markets and look forward to returning to pre-Covid levels on many of our popular routes in the new year alongside strong vaccination rates, better testing procedures and education in all of our markets. It also shows continued strong investor confidence in our overall recovery strategy including the digital transformation which has already received overwhelming support to date through various fundraising initiatives. 

“Furthermore, we have also secured approval from Danajamin Nasional Bhd for an 80% guaranteed loan of up to RM500 million. All of which signal strong support for our transformation strategy to become more than just an airline in the digital era. 

“Importantly, with today’s announcement, our fundraising strategy remains firmly on track. We have now achieved over RM 2.5 billion of fundraising, providing strong liquidity to ramp up operations through next year when we expect to be sustainable and driving shareholder value once again.

“As our digital transformation continues to gain strong momentum, we now look forward to raising fresh capital for our fast growing super app, our regional logistics venture Teleport and engineering company, Asia Digital Engineering (ADE) in the near future.

“Our airasia Super App with 16 different travel and lifestyle offerings is already one of the top three online travel agencies (OTAs) in Southeast Asia and is on its way to achieve its goal to become the super app of choice for everyone in Asean, with not only the best value flights and accommodation, but also food, health, beauty, delivery, edutech, ride hailing and more. Teleport is experiencing significant growth capitalising on the huge surge in the region’s e-commerce industry for first to last mile deliveries and we see huge potential for ADE to become the leading aircraft maintenance provider in Asean.” 

The Rights Issue entailed the issuance of 7-year Redeemable Convertible Unsecured Islamic Debt Securities (“RCUIDS”) with a nominal value of RM0.75 each, plus free detachable warrants, on the basis of 2 RCUIDS with 1 warrant for every 6 AAGB shares held. As a key component of AAGB’s fund-raising initiatives, the Rights Issue will enable AAGB to support various segments of the Group, including but not limited to, working capital and other operational costs incurred due to the outbreak of the global Covid-19 pandemic and costs required to ramp-up operations to be prepared for the rebound of international travel, balanced with funding growth of the various airasia digital business units.