Capital A secures USD 443 million revenue bond to strengthen financial position and propel AirAsia’s growth

KUALA LUMPUR, August 23, 2024 -- Capital A Berhad (“Capital A”) is thrilled to announce the successful signing of a $443 million revenue bond for AirAsia, a critical step in the ongoing commitment to strengthening its financial position and accelerating growth for its airline business. This financing represents a significant milestone in AirAsia's journey to emerge stronger and more resilient following the challenges posed by the global pandemic.

Two leading private credit funds, Ares Management Corp and Indies Capital Partners, will provide $200 million of the funding, which will be strategically utilised to reactivate aircraft that were grounded during the pandemic. The remaining $243 million tranche, subscribed by sting aircraft lessors will be used to refinance existing lease liabilities, further strengthening its balance sheet.

Capital A CEO Tony Fernandes said, “Securing this USD 443 million revenue bond is a monumental development for us.  It reflects the immense confidence that investors have in our vision and future. We’re approaching the finish line of our post-pandemic recovery journey. The Extraordinary General Meeting documents have been submitted to Bursa Malaysia, awaiting review and approval, after which we will see the emergence of two incredible companies—Capital A and AirAsia Group—both free from PN17 status. The last five years have been our most challenging, but the rewards for our shareholders will be substantial as we embark on this exciting new chapter.”

Bo Lingam, Group CEO of AirAsia Aviation Group said, “This revenue bond is timely in strengthening AirAsia's financial position and liquidity. Against a backdrop of growing travel demand, we will use this funding to expand and reactivate our fleet and refinance lease liabilities for a more robust balance sheet. We plan to reactivate 10 aircraft in October, with an additional 15 to follow in 2025. With ongoing customer experience initiatives and a rapidly expanding network, the future is bright for AirAsia as we accelerate into our goal of being the world's best airline.”

Fernandes further emphasised: “Closing this deal marks a critical turning point for AirAsia. We are not merely recovering from the pandemic’s impact—we are emerging stronger than ever. This financing underscores the effectiveness of our strategic planning and the unwavering support of our investors, positioning us for a bright and prosperous future.”

Evercore Asia (Singapore) Pte. Ltd. acted as the exclusive financial adviser to Capital A on this transaction, alongside international legal advisor A&O Shearman and local legal advisor Christopher & Lee Ong.

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