By Firdaus Hashim
Thai Air Asia has launched a crowdfunding bond campaign as the low-cost carrier seeks to boost its capital. Known as “Project Lift”, the airline’s campaign that was launched on September 9 seeks to raise around Bath 80 billion by issuing debentures to retail investors and the general public through the Peer Power investment platform. It goes on to say that approval to conduct the campaign was granted by Thailand’s Securities and Exchange Commission.
The campaign’s page indicates that the bonds will require a minimum investment amount of Bath B50,000, have a term of six months, and an interest rate of 6.75 percent per annum. Thai AirAsia says proceeds will be used to “shore up its short-term stability”. In addition to the campaign, it will continue to maintain its existing funding plan by raising fresh capital and a business restructuring of its parent company Asia Aviation, which owns a 55 percent stake in Thai AirAsia.
During the April-June 2021 fiscal quarter, Thai AirAsia posted an operating loss of Baht 2.76 billion, up 53 percent year-on-year. Revenue for the quarter fell 51 percent to Baht 1.08 billion, and that net loss grew 46 percent to Baht 3.04 billion. Parent Air Asia Berhad recorded a RM 5.9 billion net loss for 2020.
Nok Air details ways to turn profitable
Elsewhere, compatriot Nok Air has outlined measures it will undertake to turn profitable and eliminate its negative equity status, which will run alongside its ongoing business rehabilitation plan.
Nok detailed the measures after it was warned by the Stock Exchange of Thailand (SET) in a 9 September notice that the airline is subject to possible delisting as a result of negative equity in 2020. It was also told to set a timeline in implementing a business rehabilitation plan and to notify its shareholders and investors by 8 October. The low-cost carrier, which has been placed under Thailand’s bankruptcy protection since July 2020, detailed those measures on 10 September.
It says measures include raising fresh capital, growing revenue from cargo operations, and starting new routes once the pandemic situation eases. Fleet-wise, it intends to raise its utilization rate while also negotiating with lessors to reduce aircraft lease rates. An organizational restructuring will be pursued, along with debt restructuring. Looking ahead, the airline expects the overall business outlook to recover in 2022, and this “will be a factor to support airline business to return to normal under [an] efficient capital structure”, which includes a future capital injection, it adds.
The airline’s 2020 financial results, which were released on 1 September, showed that its equity had turned negative in the amount of Baht 7 billion. During the year, Nok’s operating loss grew more than sixfold to Baht 9.43 billion. Revenue fell 46 percent year-on-year to Baht 6.74 billion, while net loss for 2020 came in at Baht 7.39 billion. Nok Air’s proposed business rehabilitation plan is now under consideration by the country’s Central Bankruptcy Court and could be approved at a hearing scheduled for 15 September.
As of 15 July 2020, nearly 75 percent of Nok Air is collectively owned by three shareholders: Hathairatn Jurangkool, Nuttapol Jurangkool, and Thaveechat Jurangkool. Thai Airways International also holds a 13.3 percent stake in the airline.