PT Air Asia Indonesia is considering restructuring some liabilities and selling shares to repair its balance sheet, which has kept its shares suspended since July. The airline is exploring converting trade payables and lease liabilities owed to controlling entities into perpetual instruments that would effectively count as equity. It is also considering a rights issue or a private placement.
These recapitalization options are unfolding against a much bigger funding squeeze at parent Air Asia Group Bhd., which had a record $4.1 billion of debt at the end of June and is seeking about $1 billion in refinancing. Last month, the group’s co-founder and adviser Tony Fernandes said fresh capital would be injected into the Indonesian and Philippine operations, with new shareholders expected to join affiliates. Shares of Air Asia Indonesia have been suspended since early July because its latest financial statements showed negative equity.
It has not chosen a path yet and is still assessing funding needs, market conditions and the feasibility of each option with shareholders and outside advisers, it said in the filing. The measures under review are intended to strengthen its capital structure that should also help it comply with exchange requirements, it said.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing