Malaysia's AirAsia raises $443 mln to refurbish grounded planes (updated)

Logan

22/08/2024 07:16

* 
      AirAsia to use about $200 mln to reactivate grounded
aircraft
    

        * 
      Shares of Capital A up 4.6%
    

  
 (Adds further background and details in paragraph 5, 7-11)
    By Rajasik  Mukherjee and Rishav Chatterjee
       Aug 22 (Reuters) - Malaysian low-cost airline AirAsia
has raised $443 million in a dual-tranche financing to refurbish
planes that were grounded during the pandemic and refinance its
lease liabilities, parent company Capital A said on Thursday.
    Shares of Capital A  CAPI.KL  were 4.6% higher as of 1049
GMT. Bloomberg News reported the financing earlier in the day.
    Global investment manager Ares Management and
Singapore-headquartered Indies Capital Partners have issued a
$200 million tranche, while some aircraft lessors have offered
$243 million to AirAsia.
    The airline said it would use about $200 million to
reactivate grounded aircraft, and the rest to refinance its
lease liabilities and strengthen its balance sheet. The
financing is structured as privately placed bonds linked to
revenue.     
    The deal highlights the rise of private credit funding in
Asia as a rival to traditional banks and other financial
institutions by offering floating and higher rates of return. 
    The private credit industry has played a crucial role in
helping out several indebted companies of late, a trend that has
impressed analysts.
    In late July, Hong Kong-based property developer New World
Development  0017.HK  secured two onshore loans worth 1.4
billion yuan ($196.14 million), while Chinese developer Logan
Group  3380.HK  signed a HK$8.2 billion ($1.05 billion) loan
last week. 
    AirAsia is not new to the private credit space. The
carrier's maintenance and engineering affiliate had raised $100
million from OCP Asia in April 2023. 
        Evercore Asia (Singapore) Pte. Ltd. acted as the
exclusive financial advisor to Capital A on the financing deal
for AirAsia. 
  
    


($1 = 7.7960 Hong Kong dollars)

($1 = 7.1379 Chinese yuan renminbi)

 (Reporting by Rajasik  Mukherjee and Rishav Chatterjee in
Bengaluru; Editing by Shinjini Ganguli and Devika Syamnath)
 ((Rajasik.Mukherjee@thomsonreuters.com;))