According to a report submitted to Bursa Malaysia, AirAsia Group Bhd has proposed to issue a rights issue that can be increased up to RM1.024 billion in the nominal value of unsecured Islamic debt securities.
As such, it can also be exchanged and redeemed within seven years at a nominal value of 75 sen each (RCUIDS) based on two RCUIDS with one free removable warrant for every six AirAsia Group shares held.
AirAsia Group also said that the proceeds will be used, among others, for fuel hedging solutions, rental payments, aircraft maintenance and general working capital as well as for AirAsia Digital Sdn Bhd's business units.
However, the situation has caused AirAsia shares to trade 3% lower in the trading session on Bursa Malaysia today.
At 10.04am, AirAsia Group's share price rose 86 sen after falling three sen or 3.39% to 85.5 sen.
At 86 sen, AirAsia has gained a market capitalization of around RM3.35 billion based on its 3.9 billion issued shares.
AirAsia Group said that “under the maximum scenario, the proposed rights issue would represent the issuance of 1.37 billion RCUIDS along with 681.71 million new warrants”.
Under the minimum scenario, the rights issue would require the issuance of RM974.51 million nominal value of RCUIDS which represents the issuance of 1.03 billion RCUIDS along with 649.68 million new warrants.
TA Securities Holdings Bhd analyst Tan Kam Meng advised AirAsia Group shareholders to subscribe to their rights securities and participate in the AirAsia Group's outbreak of recovery after the Covid-19 pandemic.
According to him, corporate execution is very important to increase the balance sheet of the AirAsia Group and ensure that the company continues to operate.
Tan also said that the recovery of the AirAsia Group could be "fast and furious".
