Air Asia books 14 billion baht from capital raising plans, prepares for future rebound

Asia Aviation (AAV), the operator of Thai AirAsia, said its latest 3-billion-baht rights offering was fully subscribed, completing a total fundraising of 14 billion baht. Analysts viewed this as a positive sign ahead of tourism recovery.

The airline said that its rights offering to the existing shareholders of 1.7 ordinary shares, which was made available to shareholders on January 10, was fully subscribed in just five days. 

This followed the prior moves to raise 8.8 billion baht with private placements and issue 2.2 billion baht via convertible bonds. All three plans added a total of 14 billion baht in working capital and rearranged the airline’s shareholding structure.

KGI securities assessed this development as “optimistic” given a recovery in the aviation industry once the pandemic improves. 

“AAV’s performance will be able to recover over the next few years … following the reopening of Thailand and related countries,” KGI analyst Parin Kitchatornpitak said in a note. 

The shareholding restructuring is key to escaping the liquidity problem, he stressed. 

With impact from travel restrictions that grounded flights in 2020 and 2021, AAV consistently reported losses in its financial results. For the third quarters of 2021, it booked 5.7 billion abht losses, while losses in 2020 stood at 4.8 billion baht. 

KGI set the target price for AAV at 2.72 baht. By midday, the airline stock traded at 2.50 baht, equal to its prior closing.

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