Capital A Bhd or formerly AirAsia Group Bhd failed to obtain a loan facility worth RM500 million under the ‘Danajamin Nasional Bhd Caring Guarantee Scheme’ due to founders Tony Fernandes and Datuk Kamarudin Meranun refusing to be guarantors.
Capital A, which is in the process of recapitalization, also failed to meet Danajamin's requirements to submit a restructuring plan and failed to obtain approval from Bursa Malaysia Securities Bhd.
As a result, it created uncertainty over the implementation of the recapitalization of Capital A as the loan from Danajamin was a major part of the fundraising plan.
According to the Bursa filing, Capital A stated that the company would not proceed with the loan facility due to ‘failure to accept and/or meet certain conditions’ set by Danajamin.
He said the Danajamin condition required Fernandes and Kamarudin, who both control 24.64% of Capital A through Tune Air Sdn Bhd by 12.41% and Tune Live Sdn Bhd by 12.23%, as joint guarantors.
Add the company further, they will look for other debt financing alternatives whose terms are in line with the company’s operations and financing needs.
For your information, Capital A previously announced that they have received approval from Danajamin for a guaranteed loan of RM500 million under the Danajamin Prihatin Guarantee Scheme.
Capital A plans to use the loan in an effort to raise RM2.5 billion for the company's recapitalization due to the delay in operations caused by Covid-19.
In addition, Capital A also raised RM336.46 million from the private placement of 470.21 million new shares in March and another RM974.5 million through the rights issue of 1.11 billion in redeemable convertible unsecured Islamic debt securities (RCUIDS) in December.
Meanwhile, Capital A was given Practice Note 17 (PN17) status on January 13 after its application for an extension of the 18 -month release period until January 7, 2022 was rejected by Bursa.
Capital A shares traded 6.82% lower at 62 sen during the morning session of March 11 with a company capitalization of 2.56 billion.