AirAsia X plans a stock issue to raise funds while undergoing a critical restructuring process.
It aims to raise about MYR500 million ($123 million) from current and new investors.
This is a ‘critical component’ of the restructuring plan, the airline said.
"There are several scenarios envisaged within our business plan and the funds to be raised are adequate for each of these scenarios," it said.
AirAsia X’s planned capital reduction will be expanded by reducing the issued share capital by a massive 99.9%.
"Credit arising from the proposed share capital reduction will be used to offset part of the accumulated losses," it said.
This bold move will ‘provide a platform to seek fresh funding.’
The airline admits it is facing strong opposition from creditors, notably aircraft lessors.
The move is an essential one if it is to survive and prosper, it says.
"A comprehensive reset of the airline is required to provide a platform to rebuild, and a vehicle attractive enough for investors to invest in."
It is still ‘engaging’ with lessors to ‘allay their concerns.’
Written by Ray Montgomery, Asia Editor
