AirAsia X mulls alternative fundraising plans

KUALA LUMPUR (Oct 26): AirAsia X Bhd (AAX), the medium haul, low-cost affiliate of Capital A Bhd, said it is in the midst of formulating a comprehensive proposed plan to regularise its Practice Note 17 (PN17) condition.

This follows the lapse of an extension of time granted by Bursa Securities on Wednesday (Oct 26) for AAX to complete the implementation of its corporate exercises announced in May last year, which entail raising up to RM116 million via a one-for-one rights offering and a special issue to raise RM50 million.

“The extension of time granted by Bursa Securities to complete the implementation of the remaining corporate exercises has lapsed today (Oct 26). Accordingly, the remaining corporate exercises will not be implemented,” it said in a bourse filing.

Under its latest proposed regularisation plan, AAX said it had on Oct 12, via AmInvestment Bank Bhd, submitted an application to Bursa Securities for an extension of time of six months up to April 28, 2023, for the airline to submit the plan to the Securities Commission Malaysia (SC) or Bursa Securities.

In February, AAX had announced that it has fixed the issue price for its one-for-one rights issue at 28 sen per share, which would raise up to RM116 million, with a similarly priced special issue to raise RM50 million from the proposed share subscription by a special purpose vehicle (SPV) called Garynma Investments Pte Ltd. The airline had planned to use the funds for working capital. In addition, the SPV would also be given an option to subscribe to an additional 15% of the enlarged total number of AAX shares after the fundraising exercises.

But in announcing its 4QFY22 results on Aug 19, AAX said it is still in the midst of securing the underwriter(s) for the rights issue and the SPV has not signed the share subscription agreement of RM50 million to date.

The rights issue price of 28 sen represents a discount of 32.7% to the theoretical ex-all price (TEAP) of the shares of 41.58 sen based on the five-day volume weighted average market price of the shares of 55.15 sen on Feb 18 (at the point of announcement). Since then, however, the price of the shares has dropped to a closing price of 40 sen on Wednesday (Oct 26), which would imply a narrower discount of 17.6% to the TEAP of 34 sen.

AAX had triggered the criteria for PN17 classification last October, after its external auditors, Messrs Ernst & Young PLT, had expressed a disclaimer of opinion in the airline’s audited financial statements for the 18-month financial period ended June 30, 2021. It has up to 12 months to regularise its condition from Oct 29, 2021.

AAX shares are down 38.46% year to date. Its market capitalisation now stands at RM163.9 million.