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Asia Aviation (AAV) said on Tuesday that the board of directors has approved its corporate and capital restructuring plan through loan provisioning from a new investor and listing its subsidiary Thai AirAsia on the Stock Exchange of Thailand in place of the original company.
The airline has been putting its best efforts to continue its operation during the Covid-19 pandemic, said the statement. However, they “were still unable to prevent the company escaping the effects of Covid-19 as the income from passenger fees has drastically decreased.”
AAV added that it has not yet received any support from financial institutions or soft-loan measures from the government, citing the latest wave as “more severe and serious than the previous outbreak.”
As a result, the new investor, who is unconnected to both AVV and Thai AirAsia, will provide a 3.15-billion-baht loan to the subsidiary Thai AirAsia with no interest charged.
The loan will be made in the form of convertible bonds in which the investor can transfer the amount into ordinary shares of Thai AirAsia later. The expected conversion price will be 20.39 baht per share from the principal amount of 3.15 billion baht, with a par value of 0.5 baht per share.
The conversion period will likely be after regulators have approved an initial public offering (IPO) of Thai AirAsia to list in the market and delisting AAV from the trade.
“The new investor is in the process of conducting due diligence on the business of Thai AirAsia,” noted AAV, adding that it expected the process to be completed by mid-May.
If the listing process of Thai AirAsia is successful, the major creditor, AirAsia Investment Limited, holding the current 19.6 million shares at par value of 10 baht per share, equivalent to 392 million share at par value of 0.5 baht per share, and accounts for 45 per cent of paid-up capital of Thai AirAsia must be convert all loans to be used for debt repayment not more than 3,900 million baht into equity.
According to the statement, the IPO of Thai AirAsia will be offered at no more than 135.2 million shares at the newly-issued price of 20.39 baht per share.