Malaysian carrier AirAsia to raise up to $238 million via rights issue

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FILE PHOTO: AirAsia Airbus A320-200 planes are seen on the tarmac of Kuala Lumpur International Airport 2 (KLIA2) in Sepang, Malaysia, February 4, 2020. REUTERS/Lim Huey Teng

 

KUALA LUMPUR (Reuters) - Malaysian budget carrier AirAsia Group Berhad plans to raise up to 1 billion ringgit ($238.72 million) through a rights issue, it said on Monday.

 

The airline has been looking to raise funds to weather the global travel slump triggered by the COVID-19 pandemic.

 

The rights issue will be used to fund AirAsia's working capital and other operational costs, and to grow its digital businesses, the company said in a statement.

 

"The exercise will provide a platform to seek a fresh funding injection from shareholders to maintain liquidity during the downtime in flying and fuel growth of the key non-airline digital businesses," AirAsia Chief Executive Tony Fernandes said.

 

The company said it has made progress in talks to secure "a number of other fundraising initiatives."

 

The rights issue, which includes 7-year redeemable convertible unsecured Islamic debt securities, is expected to be completed in the fourth quarter.

 

AirAsia has been focusing on its digital business recently. Last week, it agreed to buy Indonesian ride-hailing and payments firm Gojek's Thailand business. It has also applied for a digital banking license in Malaysia.

 

-- © Copyright Reuters 2021-07-13