AirAsia X intends to raise RM 50 million ($11 million) of new capital with the placement of shares with two institutional investors. Proceeds will be used for the reactivation and maintenance of some six Airbus A330s that are currently in storage. AirAsia X to raise new capital to fully reactivate the fleet.
The Malaysian company announced the proposed placement of shares on Tuesday. It would be the first equity raise for the airline since 2015. “The proceeds from the Proposed Placement would serve as an interim fundraising measure to bolster its short-term working capital requirements as the Company continues to recover and grow its operations in this post-pandemic era,” AirAsia X said in a media statement.
The ultra-low-cost and medium-haul airline was forced into a deep financial restructuring during the Covid crisis when it was grounded for two years as the network had collapsed. It resumed operations in the June quarter of 2022 After rebuilding the balance sheet and shedding debt, AirAsia X has been able to report two profitable quarters in September and December 2022.
The network includes sixteen routes
The network has been rebuilt to sixteen medium-haul routes and 83 weekly flights. The reopening of China should offer good opportunities to recover market share. The airline recently returned to Chengdu for the first time in three years.
“Since the reopening of the regional borders last year, AirAsia X continues to grow and we have been ramping up our operations to cater to the demand for international air travel across the regions. As of May 2023, AirAsia X has seventeen aircraft within its fleet, with eleven activated and operational and we aim to activate more aircraft by the end of the year,” said CEO Benyamin Ismail.
“On the back of this momentum, the Proposed Placement would be a timely and strategic means for the Company to raise funds which will primarily be used for the reactivation and maintenance of the Company’s fleet,” the airline says in the statement.
