Business

Tuesday June 30, 2009

AirAsia may sell as much as 20% more stock to cut debt


KUALA LUMPUR: AirAsia Bhd, South-East Asia’s largest low-cost airline, said it plans to sell new shares to reduce debt in what would be the Malaysian company’s biggest share sale since listing in 2004.

The Sepang-based company plans to issue as much as 20% more stock, it said in a statement to Malaysia’s stock exchange after the close of trading yesterday.

Chief executive officer Datuk Seri Tony Fernandes said last month the company was considering raising about RM500mil in either a stock sale or rights offer.

AirAsia expects to take delivery of about 24 Airbus SAS planes annually from an order of 175 as the carrier adds routes to India and boosts flights to China.

The company will probably sell the stock in a rights offer to shareholders and use the money to lower its ratio of debt to equity, also known as gearing, Mohshin Aziz, AirAsia’s head of investor relations, said by phone.

AirAsia is “trying to reduce risk, trying to get structures where we can reduce the fluctuation impact of the markets, be it interest rates, forex, fuel if we can, to make the business more stable and predictable in terms of our cost component,” he said, adding that a price had yet to be set for the rights offer.

Based on yesterday’s closing price of RM1.15, the share sale could raise as much as RM546mil. – Bloomberg


AIRASIA : [Stock Watch] [News]


For latest Bursa Malaysia indices, charts and other information click here

  • E-mail this story
  • Print this story