Malaysia’s Asia Digital Engineering Sdn. Bhd. has secured a US$100mil bank loan to refinance part of its expensive private debt, a sign lenders are growing comfortable backing the company after its parent Capital A Bhd
.’s exit from distressed status.
The proceeds of the loan received from Qatar’s QNB Group will be used to fund the aircraft maintenance firm’s planned expansion and capacity growth, the company said in a statement on Friday.
Part of the debt has also been used to refinance a 2023 loan of the same amount from private credit provider OCP Asia Ltd., an ADE representative said in response to a Bloomberg query. OCP declined to comment.
The bank loan facility follows Capital A’s exit earlier this week from Practice Note 17 status, a Malaysian stock exchange’s classification for distressed listed companies. The move capped a six-year restructuring that included the disposal of its aviation business to AirAsia X Bhd. this year.
Firms often choose to refinance their private credit facility with cheaper bank loans after improvements in their credit profile. For example, Canadian International School took a bank loan from Deutsche Bank AG and DBS Group Holdings Ltd. to replace a private credit facility from BlackRock Inc.
ADE, controlled by Malaysian businessman Tan Sri Tony Fernandes, started as an internal engineering unit serving budget airline AirAsia. It has since expanded into an aviation services provider supporting global airlines.
AirAsia Aviation Group, also controlled by Fernandes, is looking to lower its borrowing costs as well. It was planning a bond sale of as much as US$600mil last year to refinance a US$443mil two-tranche securitised bond raised in 2024. Private credit funds Ares Management Corp. and Indies Capital Partners Pte. provided a US$200mil tranche then, while aircraft lessors supplied the rest. - Bloomberg
