AirAsia X (D7, Kuala Lumpur International) plans to issue 32,258,066 new ordinary shares, constituting approximately 7.78% of the total ordinary shares now on issue, to institutional investors in a bid to raise MYR50 million ringgits (USD10.91 million).

In a May 22 Bursa Malaysia filing, the long-haul low-cost airline said it had entered into conditional subscription agreements to sell the shares at MYR1.55 (USD0.34) each. AHAM Asset Management Berhad will buy 12,909,033 shares for a total price of MYR20,009,001 (USD4,364,967), AIIMAN Asset Management Sdn Bhd will acquire 3,220,000 shares for a total price of MYR4,991,000.00 (USD1,088,788), and Lavin Group Sdn Bhd will buy 16,129,033 shares for a total price of MYR25,000,001 (USD5,453,755).

After placement expenses of MYR600,000 (USD130,890), AirAsia X will pocket MYR49.4 million (USD10.8 million), of which MYR23 million (USD5.02 million) will go towards aircraft activation costs, MYR18.5 million (USD4.04 million) will be used for aircraft maintenance costs, and MYR7.9 million (USD1.72 million) will be spent on other operating expenses such as leases and maintenance. None of the current AirAsia X directors, major shareholders, or its CEO, have any direct or indirect interests in the placement.

"AirAsia X continues to grow and we have been ramping up our operations to cater to the demand for international air travel across the regions," said AirAsia X CEO Benyamin Ismail. "With this proposed placement, all indicators signal the company is moving into the right direction and will have a much stronger ground for its continued and concerted efforts to revitalise its business, as the industry’s recovery takes place in the near future.”

Ismail said this is the airline's first equity fundraising exercise since 2015. The airline remains subject to Bursa Malaysia Practice Note 17 (PN17) conditions, which requires regularisation of AirAsia X's financial position or risk possible stock market delisting. The CEO said that since the October 2021 PN17 issuance, AirAsia X has embarked on a debt restructuring scheme, a corporate restructuring exercise, and major cost containment exercises.

According to ch-aviation fleets data, the airline has 11 of its fifteen A330-300s in service, and is flying to 22 destinations in 12 countries. During the height of the pandemic, AirAsia X ceased scheduled services, only keeping one or two aircraft operational for charters and repatriation work.

"While the company continues to evaluate the Group’s financial performance as well as the viability of its PN17 regularisation plan, the company proposes to undertake the proposed placement as an interim fund raising measure to bolster its short-term working capital requirements alongside the Group’s resumption of operations back to normalcy," the filing reads.

The proposed placement is subject to approval from the stock exchange and other relevant parties, including AirAsia X shareholders who will be asked to approve the issuance at a June 8 annual general meeting