Capital A Berhad, the parent company of AirAsia, has secured a $443 million revenue bond to bolster its financial position and support the airline’s growth, the company announced Tuesday.
The funding comes as the aviation industry continues to recover from the impacts of the COVID-19 pandemic. According to Capital A, $200 million of the bond will be provided by private credit funds Ares Management Corp and Indies Capital Partners. This portion will be used to reactivate aircraft grounded during the pandemic.
The remaining $243 million, subscribed by aircraft lessors, will refinance existing lease liabilities to strengthen the company’s balance sheet.
Capital A CEO Tony Fernandes said, “Securing this USD 443 million revenue bond is a monumental development for us. It reflects the immense confidence that investors have in our vision and future.”
Bo Lingam, Group CEO of AirAsia Aviation Group, outlined plans to expand the airline’s fleet. “We plan to reactivate 10 aircraft in October, with an additional 15 to follow in 2025,” Lingam said.
The financing deal comes as Capital A awaits regulatory review of its aviation disposal proposal submitted to Bursa Malaysia. The company aims to exit PN17 status, a classification for financially distressed firms on the Malaysian stock exchange, once it receives necessary approvals.
Evercore Asia (Singapore) Pte. Ltd. acted as the exclusive financial adviser for the transaction, with A&O Shearman and Christopher & Lee Ong providing legal counsel.
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