Thai AirAsia Parent Formulates New Restructuring Plan Capital-Raising Strategy

By Linda Khoo Hui Li BANGKOK, Oct 21 (Bernama) -- Asia Aviation Plc. (AAV), the major shareholder of Thai AirAsia Co. Ltd. (TAA), has unveiled a new shareholder restructuring plan worth 14 billion baht (US$419.84 million) in capital, involving the issuance of convertible bonds and new ordinary shares to both new and existing shareholders. (US$1 = 33.35 baht) Through this process, AAV aims to hold all shares in Thai AirAsia and enhance liquidity for the airline. In a statement, Asia Aviation Plc and Thai AirAsia executive chairman, Tassapon Bijleveld said as the airline gears up for the resumption of travel post-COVID-19, some changes needed to be made to its capital raising and revenue management strategy. He said AAV has formulated a new restructuring plan to provide the company with both working capital and the liquidity needed to sustain its operations in line with Thailand’s plans for the reopening of its borders on Nov 1. “The new plan is expected to be implemented within the first quarter of 2022 after considering previous operational and capital adjustments and negotiations with new investors, shareholders and creditors of both AAV and TAA. “AAV will increase its registered capital and offer newly-issued ordinary shares for private placement, totalling approximately 8.8 billion baht. “The revised shareholder restructuring plan will also offer AirAsia Aviation Ltd (AAA) additional investment of 7.8 billion baht and up to 1 billion baht to individual investors by allocating shares not exceeding 5.03 billion shares (with a par value of 0.10 baht per share),” he said. He added that AAV will issue and offer the convertible bonds worth 2.2 billion baht with a maturity period of not more than two years to two key investors - Bangkok Bank Plc (1.2 billion baht) and North Haven Thai Private Equity L.P (1 billion baht). “The conversion ratio of 0.00175 convertible bonds can be converted into one ordinary share, and can be converted to new shares in the maximum amount of but not exceeding 1.25 billion shares (with a par value of 0.10 baht per share). “Furthermore, AAV will increase its registered capital and offer the newly-issued shares to existing shareholders of the company proportionate to their respective shareholdings, in the amount of not exceeding 1.71 billion shares with the ratio of 5.76 existing ordinary share to one ordinary share at the offering price of 1.75 baht per share, totalling approximately 3 billion baht. “Once the restructuring is completed in the first quarter in 2022, AAV will hold all shares in TAA using capital raised through the fundraising,” he said. Tassapon said the new plan would simplify and accelerate funding, adding that existing investors and shareholders will also benefit from the exercise. “The board has thoroughly considered all possibilities to formulate a new shareholder restructuring plan that will expedite TAA’s rejuvenation and reaffirm its market leadership. “We expect to resume our normal domestic operations fully in January 2022, and we are also looking forward to recommencing our key international routes in the near future,” he said. In an exchange filing late Tuesday, AAV said a financial institution would grant a loan facility to AAV in the amount of 3.9 billion baht, with Thai AirAsia acting as the guarantor. -- BERNAMA