AirAsia get banks’ nod for RM1b funding

Tan Sri Tony Fernandes said of this debt funding, a certain portion would be eligible for the government guarantee loan under the Danajamin PRIHATIN Guarantee Scheme in Malaysia.

KUALA LUMPUR: AirAsia Group Bhd, which plans to shore up its liquidity to ensure sufficient cashflow, has received support from certain financial institutions for its funding request of more than RM1bil.

Its CEO, Tan Sri Tony Fernandes said of this debt funding, a certain portion would be eligible for the government guarantee loan under the Danajamin Prihatin Guarantee Scheme in Malaysia.

“Other than Malaysia, our Philippine and Indonesia entities are currently in various stages of bank loan applications. “In the Philippines, we have applied for the government guaranteed loan under the Philippine Economic Stimulus Act (PESA), with an expected positive outcome,” he said in a statement.

Fernandes said it had been presented with proposals in various forms of capital raising, be it debt or equity, and are in ongoing discussions with numerous parties, including investment banks, lenders, as well as interested investors in seeking a favourable outcome for the group.

He added that during the hibernation period, the group has taken significant measures internally as a group while also reaching out externally for assistance to ensure our working capital remains intact.

“Internally, we have embarked on headcount rationalisation for leaner operations, given the current demand for air travel and expectations on recovery. Internal cost-cutting efforts include a group-wide temporary salary reduction of between 15% and 75%.

“We have received deferrals from our supportive lessors and are now working on further extensions.

We have also restructured 70% of our fuel hedging contracts and are continuously negotiating with our supportive counterparties for the remaining exposure. “All in all, we expect at least 50% reduction in our cash expenses in 2020,” he said.