PETALING JAYA: AirAsia X (AAX) Bhd’s private placement pricing of RM1.55 per share – a 19.3% or 37 sen discount based on yesterday’s closing price of RM1.92 – appears to have miffed some investors.
The medium-haul low-cost carrier’s share price hit an intraday low of RM1.81 in early trade, a drop of 5.7% from yesterday’s closing price which was the highest in the last three years.
The issue price of RM1.55 represented a discount of 15.96 sen or 9.34% to the five-day volume weighted average market price of RM1.7096 per share on May 19.
AAX plans to issue 32.26 million new shares, or 7.78% of its total issued shares, to AHAM Asset Management Bhd, AIIMAN Asset Management Sdn Bhd and Lavin Group Sdn Bhd.
In total, this would raise roughly RM50 million for the group and will go towards working capital for aircraft activation and maintenance costs.
The proposed exercise is expected to be completed in the third quarter of 2023.
In a statement today, AAX said its placement of shares with the institutional investors was “timely and strategic” to raise funds primarily for use to reactivate and maintain the company’s fleet.
It said the placement is its first equity fundraising exercise since 2015 as AAX continues to evaluate its operational and financial performance as well as the viability of its Practice Note 17 (PN17) regularisation plan.
“The proceeds from the proposed placement would serve as an interim fundraising measure to bolster short-term working capital requirements as AirAsia X continues to recover and grow its operations in this post-pandemic era,” it added.
CEO Benyamin Ismail said AAX continues to grow since the reopening of the regional borders last year and has been ramping up its operations to cater to the demand for international air travel across the regions.
“As of May 2023, AirAsia X has 17 aircraft within its fleet, with 11 activated and operational, and we aim to activate more aircraft by the end of the year.
“So far, we have reported a turnaround of the company’s financial performance from lossmaking to registering two consecutive quarters of profit for the financial periods ended Sept 30, 2022, and Dec 31, 2022,” he added.
He said that with this proposed placement, all indicators signal the company is moving in the right direction.
AAX currently flies to 16 medium-haul destinations, including the recently launched Chengdu (Tianfu) and three short-haul routes from Kuala Lumpur to Kota Kinabalu, Bali – Denpasar and Bangkok, with a total of 83 flights weekly.
By the close of trade, its share price had pared earlier losses, declining 1.04% or two sen to RM1.90, giving it a market capitalisation of RM788.15 million.
