AirAsia’s private placement a move in the right direction
Published on: Saturday, January 23, 2021
By: Bernama
The exercise will only serve as a stopgap measure to partially address the company’s financial concerns. (Pic: Focus M)
Kuala Lumpur: AirAsia Group Bhd’s proposal to undertake a private placement of up to 20 per cent of its existing 3.34 billion shares is a step in the right direction for the company, said MIDF Amanah Investment Bank Bhd (MIDF).In a note Friday, it said the exercise will only serve as a stopgap measure to partially address the company’s financial concerns.
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The management had earlier indicated a conservative estimate of group capital needs of between RM2 billion and RM2.5 billion to tide it over comfortably until the end of the 2021 financial year (FY21).
“We concur with the management’s estimates as we project the group’s current cash and equivalent stood at around RM1.2 billion; already a very optimistic projection that includes cash balances as of nine months of 2020 (9M20) and proceeds from recent partial stake sale in AirAsia India. “This represent about 5.5 times monthly burn rate (estimated at RM220.0 million) as per its 9M20 earnings result,” the investment bank said.Stay up-to-date by following Daily Express’s Telegram channel.
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