MORE TIME FOR TONY: AirAsia’s planned RM1bil placement may only take off next year

KUALA LUMPUR – Low-cost carrier AirAsia Bhd has received another extension – the longest one yet – for the proposed private placement of new shares to its major shareholders, Tan Sri Tony Fernandes and Datuk Kamarudin Meranun.

In an announcement on Wednesday, it said Bursa Malaysia Securities had approved the application for an extension of time of six months from Oct 13, 2016, to April 12 next year to complete the private placement of 559 million 10-sen shares.

This will be the fourth and longest extension given since Bursa Securities approved the placement of the new shares, worth RM1.56bil at current price, on April 14 this year.

In the first announcement on the proposed placement, AirAsia had expected the transaction to be completed by the third quarter of 2016.

The proposed placement to Tune Live Sdn Bhd, an investment holding company owned jointly by Fernandes and Kamarudin, amounts to 16.7% of the enlarged issued and paid up capital of AirAsia. The issue price is RM1.84 per share, to be paid in cash.

When the exercise is completed, Fernandes and Kamarudin’s interest, held through Tune Air Sdn Bhd, would increase to 32.4% from the current 18.9%.

In its previous announcements on cut-off date extensions, AirAsia said Tune Live needed more time to finalise its financing requirements, which involve partial offshore borrowings.

It noted that it must await Bank Negara Malaysia’s approval in respect of the funding from its financiers, some of which were foreign banks.

On the gross proceeds of RM1.006bil from the placement, AirAsia said it would be used, among others, to pre-pay unsecured term loan facilities and repay unsecured revolving credit (RM342mil), to fund for aircraft, spare engines and other aircraft parts pre-delivery payments (RM275mil) and to construct its headquartetrs (RM103.82mil).

AirAsia closed 4 sen lower at RM2.79 on Wednesday. Since AirAsia announced the private placement, its share price has gained 34%.

AirAsia’s private placement exercise may only take off next year. The Reuters photo shows AirAsia planes preparing for take off at Don Mueang International Airport in Bangkok.