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AirAsia passes critical level

THE STAR – AirAsia Group Bhd’s financial health seems less life-threatening now that it has an injection of about MYR975mil cash into the company.

The airline group completed its rights issue yesterday, raising MYR974.5 million, to support its overall fundraising strategy.

This includes the full subscription for their entitlements by its two largest shareholders Tony Fernandes and Kamarudin Meranun, which would cost them MYR257.3mil.

With the additional cash of MYR975 million on top of the earlier MYR500 million loan from Danajamin, MYR300 million from Sabah Development Bank and MYR336.5 million raised via private placement, the cash crunch resulting from the lockdown and the pandemic is no longer as alarming, TA Research said.

It believes this new capital can help the group weather through the darkness until it sees lights at the end of the tunnel.

For the third quarter of financial year 2021 (FY21), the group incurred MYR676.9 million in core losses compared to a MYR867.4 million loss in the third quarter of FY20.

For the first nine months of 2021, its core loss was at MYR2 billion versus MYR2.6 billion reported a year earlier.

“Will AirAsia be classified as a PN17 company after the 18-month relief period granted by Bursa Malaysia due in January 2022? We view that chances for AirAsia to reverse its MYR5.9 billion deficit in shareholders’ funds by then are slim.

“Having said that, we do not think this would be disastrous as AirAsia has been sorting its way out of the woods,” TA Research said in a report.

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