KUALA LUMPUR: Long-haul budget airline AirAsia X Bhd (AAX) intends to revise the proposed reduction of 90% of its issued share capital to 99.9%.
This comprised a reduction of the issued share capital of approximately RM1,532.51 million to RM1.53 million, the airline said in a statement today.
“The credit arising from the proposed share capital reduction will be used to offset part of the accumulated losses. The proposed share consolidation which shall be undertaken following the proposed share capital reduction shall remain unchanged, that is, consolidation of every 10 existing AirAsia X shares into one AirAsia X share).
“Shareholders funds after the capital reduction remain negative but the consolidation of shares post-capital reduction will provide a platform to seek fresh funding from existing shareholders,” it said.
For its fundraising, AirAsia X has proposed to raise up to RM500 million comprising a rights issue of up to RM300 million from existing shareholders and a share subscription of up to RM200 million from new investors.
“This equity fundraising exercise is a critical component of the comprehensive restructuring and recapitalisation plan announced earlier and will support the implementation of the group’s revised business plan.
“The operating environment is evolving and dynamic. There are several scenarios envisaged within our business plan and the funds to be raised are adequate for each of these scenarios,” it said.
Prior to the fundraising, however, the airline said it must first secure the approval of its creditors for the debt restructuring scheme.
Several lessors have intervened in the restructuring proceedings to register their objections to the scheme.
“AirAsia X wishes to reiterate that the debt restructuring scheme is a prerequisite to the recapitalisation of the company by both existing and new investors and a comprehensive reset of the airline is required to provide a platform to rebuild, and a vehicle attractive enough for investors to invest in,” it added.
In the next few weeks, AirAsia X said it will continue to engage with creditors and hoped to further allay their concerns.
The alternative to the scheme is a liquidation of the airline without any returns to creditors, it said.
“Post-Covid-19, a reset with fresh equity and a repositioning of the airline as a regional medium-haul low-cost carrier will provide the best economic returns to creditors in a continued business relationship.
“The company has received some indications of interest for investment in a restructured AirAsia X and will similarly continue to engage with these potential investors,” it added.