AirAsia’s successful private share placement reflects company's strong fundamentals, digital potential
Major vote of confidence towards aviation, tourism recovery
SEPANG, 17 March 2021 -AirAsia Group Berhad announces the successful completion of its private share placement exercise with the culmination of the completion of the second tranche on 17 March that resulted in an additional 100,367,362 new ordinary shares issued, representing approximately 3% of the company's total issued shares at an issue price of RM0.865 each.
This follows the initial tranche of 11.07% or 369.85 million shares issued on 19 February that saw the emergence of Hong Kong-based investor Dr Stanley Choi Chiu Fai as a substantial shareholder after upgrading his share position to 8.96% from <5% previously.
In total, both tranches delivered 470.21 million new shares issued under the private placement exercise, representing 14.07% of AirAsia Group’s total issued shares and raised a total of RM336.46 million. The shareholders of AirAsia Group and Bursa Malaysia Securities Bhd had earlier approved for AirAsia Group to undertake the private placement exercise of up to 20% of AirAsia Group’s total issued shares.
The private share placement exercise forms part of AirAsia Group’s larger plans to raise up to RM2.0 - 2.5 billion via a combination of debt and equity to finance, amongst others, the working capital requirements of the Group.
The key investors that anchored the private placement exercise include, amongst others:
Dr. Stanley Choi Chiu Fai - He is the Chairman of Head & Shoulders Financial Group, as well as the Chairman and Executive Director of International Entertainment Corporation (IEC), a company listed on the main board of Hong Kong Stock Exchange (1009.HK). Please refer to the announcement here.
David Bonderman and several Partners at TPG investing in a personal capacity - David Bonderman is the Founder and Chairman of TPG Capital, a global investment firm headquartered in San Francisco, California and Fort Worth, Texas with approximately USD85 billion in assets under management and 14 offices around the world. He is also part-owner of the Boston Celtics and co-founder/owner of the Seattle Kraken. Mr Bonderman was a long-standing Chairman of Ryanair for over 20 years until last year. His other TPG Asia Partners investing in a personal capacity are Tim Dattels, Ganen Sarvananthan and Zubin Irani,
Aimia Inc. (TSX: AIM) is a holding company with a focus on long-term investments in public and private companies, on a global basis, through controlling or minority stakes. The company operates an investment advisory business through its wholly-owned subsidiary Mittleman Investment Management, LLC, and owns a diversified portfolio of valuable investments including a 48.9% equity stake in PLM Premier, S.A.P.I. de C.V. (PLM), owner and operator of Club Premier, the coalition loyalty program in Mexico that operates the Aeromexico Frequent Flyer program, a 49.3% equity stake in Kognitiv, a B2B technology growth company enabling collaborative commerce, a 10.85% stake in Clear Media Limited (100.HK), one of the largest outdoor advertising firms in China, as well as minority stakes in a portfolio of public company securities.
Other local and foreign institutional funds.
CEO of airasia group, Tony Fernandes said: “The successful private share placement and the overwhelming response that it received from renowned local and foreign investors were clear testaments to airasia's strong fundamentals and our tremendous future potential, especially with our pivot into digital and data-driven businesses. We are thrilled by the investors’ confidence in our turnaround plans and this proves our capabilities to raise funds from both institutional and private strategic investors in the capital market, both locally and abroad.
“We would like to thank the investors who have made this private share placement a huge success and we look forward to forging a long-term relationship with them. This placement forms a significant part of our overall fundraising exercise to ensure liquidity throughout 2021. Of the gross total proceeds, AirAsia will allocate funds to support fuel hedging settlement, general working expenses, aircraft lease and maintenance payments and fund airasia Digital business units, namely the airasia super app and BigPay fintech platforms.
“On a wider scale, the private placement is a major vote of confidence towards the recovery of the aviation and tourism industry that have been severely battered by the Covid-19 pandemic. At airasia, we have robust plans that will allow us to survive on domestic services until international borders reopen. We are confident that the rollout of vaccination programmes in our key markets that are set to immunise 40%- 50% of the populations by the third quarter of this year, coupled with better education and testing, alongside strong support for leisure travel bubbles among low risk countries and territories, and the push for global digital health passports are steadily paving the way for a major travel reboot in the near future.
“Great value, choice and innovation are three key cornerstones of the airasia brand and there are many more products and innovations in the pipeline as the airasia super app evolves. We have plans to launch a ride hailing service in coming months, and in the not too distant future, also an air taxi service and Malaysia's first drone delivery service as the company continues to diversify and rebuild, ahead of an expected huge surge in travel demand in the not too distant future, once international travel restrictions are lifted.
“With this announcement, I am assured we not only have the right foundations and platforms in place to recover faster than many of our competitors, but also will return stronger than ever.”