Thai AirAsia Parent Seeks to Raise $540 Million in Fresh Capital
In this article (5)
Asia Aviation Pcl, the operator of Thailand’s biggest budget carrier Thai AirAsia Co., plans to raise as much as 17.9 billion baht ($535 million) from new loans, share sales and convertible debt offerings as it attempts to restock coffers depleted by the worst crisis in aviation history.
A revised financial restructuring plan for the company has been put forward and Asia Aviation is consulting with new investors, shareholders and creditors, Asia Aviation said in an exchange filing late Tuesday.
The holding company joins a plethora of airlines globally trying to repair their balance sheets after Covid-19 all but put a stop to international air travel in early 2020. While climbing vaccination rates are seeing travel spring back in some parts of the world, in Asia it’s nowhere near pre-pandemic levels. Thai Airways International Pcl and Nok Airlines Pcl are also pursuing financial restructurings.
Asia Aviation Chief Executive Officer Santisuk Klongchaiya said the fresh funds should allow the airline to increase flights amid an expected recovery in tourism and travel.
Thailand’s capital Bangkok has administered at least two doses of Covid vaccine to 71% of its adult population, paving the way for the city to welcome back inoculated visitors without mandatory quarantine from Nov. 1., officials said Wednesday.
Asia Aviation plans to raise a total of 8.8 billion baht from a private share sale to Malaysia’s AirAsia Group Bhd. and an individual investor. That will comprise around 4.5 billion of new shares to AirAsia to raise 7.8 billion baht and another sale to a group of investors led by Pitharn Ongkosit, the chief executive officer of KCE Electronics Pcl, to raise 1 billion baht.
The company will also raise 2.2 billion baht from sales of convertible bonds and 3 billion baht from a rights offering. Around 3.9 billion baht will come from loans.
Asia Aviation, which owns a 55% stake in Thai AirAsia, will use most of the proceeds to acquire the shares of Thai AirAsia it doesn’t already control. Other funds will be used to repay debt.
Questions & Answers
Q.How much capital does Asia Aviation Pcl intend to raise?
How much capital does Asia Aviation Pcl intend to raise?
Asia Aviation Pcl aims to raise as much as 17.9 billion baht ($535 million) in fresh capital. This includes new loans, share sales, and convertible debt offerings.
Q.What is the intended use for the funds raised by Asia Aviation Pcl?
What is the intended use for the funds raised by Asia Aviation Pcl?
Most of the proceeds will be used to acquire the shares of Thai AirAsia that Asia Aviation Pcl does not already control. Other funds will be used to repay existing debt.
Q.Which entities are contributing to the capital raise through share sales?
Which entities are contributing to the capital raise through share sales?
Malaysia’s AirAsia Group Bhd. Will acquire new shares worth 7.8 billion baht, and a group of investors led by Pitharn Ongkosit will contribute 1 billion baht.
Q.How will the company raise the total funds beyond the private share sales?
How will the company raise the total funds beyond the private share sales?
The company plans to raise 2.2 billion baht from sales of convertible bonds, 3 billion baht from a rights offering, and approximately 3.9 billion baht from new loans.
Reader pulse
Will this capital raise secure Thai AirAsia's future?
18,255 votes so far