Thai AirAsia’s parent company, Asia Aviation (AAV), has secured board approval to raise 14 billion baht, following its 20 October announcement that it plans to raise funds by issuing convertible bonds and new shares to both new and existing shareholders. The approval comes after Asia Aviation disclosed that the fundraising plan would see the parent company conduct a private share issuance, a convertible bond issuance, and a rights offering.
The private share issuance totalling approximately 8.8 billion baht will be made to two groups of shareholders. Around 7.8 billion baht will be taken up by AirAsia Aviation Limited (AAAL), the entity that now holds the stake in all of AirAsia Group-branded carriers, while the remaining 1 billion will be held by unnamed individual investors.
Two convertible bond issuances, totalling 2 billion baht, will be made to two entities. Asia Aviation will issue 1.2 billion baht worth of bonds to Bangkok Bank, while 1 billion baht worth of bonds will be issued to North Haven Thai Private Equity. These bonds can be converted into equity in the future.
Subsequently, a rights offering totalling approximately 3 billion baht, will be made to existing shareholders. However, Asia Aviation did not specify their identities.
As a result of the fundraising plan, Asia Aviation will assume full control of Thai AirAsia. Currently, Thai AirAsia’s ownership is split on a 55:45 ratio between AAV and AAAL. Tassapon Bijleveld, the executive chairman of Asia Aviation and Thai AirAsia, says the plan is “expected to be implemented within the first quarter of 2022”.
Losses at Thai AirAsia parent grows for third quarter and nine-month basis
Meanwhile, losses at Asia Aviation for the third quarter ended on 30 September grew, with its chief executive Santisuk Klongchaiya attributing the larger loss to a third wave of COVID-19 infections impacting Thailand since April 2021.
Operating loss for the company was up 19 percent year-on-year to 3.72 billion baht, while net loss grew 14 percent year-on-year to 2.1 billion baht. Total revenue plunged 81% to nearly 458 million as compared to the 2.4 billion baht revenue for the same quarter in 2020.
On a nine-month basis, operating loss grew 55 percent year-on-year to 9.74 billion baht and that net loss amounted to 5.65 billion baht. Total revenue came in at 2.9 billion baht, a decline of 76 percent as compared to the 12 billion figure for the same period last year.
Cash and cash equivalents as of 30 September 2021 amounted to 23.1 million baht, a far cry from the 2.35 billion baht it had on the same date in 2020. It attributed the low cash balance to factors such as repayment of liabilities under lease agreements, interest paid, and a partial repayment of debentures.
In its outlook, Asia Aviation expects to see some form of recovery in the final months of 2021 amidst “positive signals” in the aviation and tourism industry. Thai AirAsia will look to raise frequency and add routes in line with improving demand, and believes it will operate the same number of domestic flights last seen prior to the COVID-19 outbreak by the first quarter of 2022. Plans to operate international flights will, however, be based on Thailand’s plans to reopen its national borders.