AIRASIA - KUALA LUMPUR. Malaysian budget carrier AirAsia Group Bhd on Thursday said it was in talks to raise more than 1 billion ringgit (US$234.52 million) in funds, a day after its auditor cast doubt on its ability to continue as a going concern.
AirAsia, like other airlines, has been slammed by the coronavirus pandemic that has hammered demand for air travel. Its auditors have said its 2019 earnings were prepared on a going concern basis, which is dependent upon a recovery from the crisis and the success of fundraising efforts.
AirAsia said it was considering various fundraising options, including debt and equity, and looking to at least halve cash expenses this year.
"We have been presented with proposals in various forms of capital raising, be it debt or equity, and are in ongoing discussions with numerous parties, including investment banks, lenders, as well as interested investors in seeking a favourable outcome for the group," the airline said in a statement.
Some financial institutions have indicated they would support a funding request of over 1 billion ringgit, it said.
Read Also: Malaysia's AirAsia sees 2020 capacity at 45-60% of 2019 levels on virus hit
A part of the funding would come from a Malaysian government guarantee loan programme, AirAsia said, adding its subsidiaries in the Philippines and Indonesia have also applied for loans.
The airline has begun to cut jobs and salaries to save costs, and is working on extensions with lessors, it said.
Earlier this week, the airline posted a first-quarter loss of nearly US$ 200 million, its biggest quarterly loss since its 2004 listing.
AirAsia has also sought payment deferrals from suppliers and lenders and halted all deliveries of Airbus SE jets this year.
Equities research firm CGS-CIMB said AirAsia would need 3 billion ringgit in new funding to maintain a healthy cash position, adding capital-raising efforts could result in shareholder dilution.
AirAsia's shares rose 5%, after dropping as much as 17% in the previous session
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