The board of Asia Aviation (AAV), the largest shareholder of budget carrier Thai AirAsia (TAA), has given the nod to the company's restructuring plan, including increasing its registered capital and issuing convertible bonds, which could raise 14 billion baht meant to purchase the remaining shares of TAA, repay loans and boost its liquidity.
Tassapon Bijleveld, AAV and TAA executive chairman, said the capital raising and revenue management strategy are needed to ready the company for the return of post-pandemic travel, especially operations for the country's reopening.
The restructuring plan includes an increase in registered capital and offer newly-issued ordinary shares in a private placement worth 8.8 billion baht.
Of that amount, 7.8 billion comes from AirAsia Aviation, a subsidiary of AirAsia Group Berhad, that holds shares in the aviation business under the AirAsia brand including TAA, and 1 billion baht from individual investors.
AAV will issue and offer the convertible bonds with a total value of 2.2 billion baht with a maturity period of not more than two years to two investors, including Bangkok Bank Plc at 1.2 billion baht and North Haven Thai Private Equity, L.P, a private fund, at 1 billion baht.
Lastly, AAV plans to increase registered capital and offer the newly-issued shares to existing shareholders at 3 billion baht from a rights offering.
AAV's board approved the plan at its board meeting on Oct 19, according to the company's statement sent to the Stock Exchange of Thailand.
This is a revised plan from the one that was earlier approved by the board on April 26.
With 14 billion baht raised, 3.9 billion will be used to repay loans to financial institutions with the repayment expected by the end of this year.
Some 3.9 billion baht will be used to buy all the remaining shares of TAA, which is 30.8% of the total shares.
"Once the restructuring is complete in the first quarter of 2022, AAV will hold all shares in TAA," Mr Tassapon said.
The remaining capital will be used as working capital and the company might increase capital to support TAA's operations in the future, which is expected to be carried out by the second quarter of next year.
He said TAA expects to fully operate its domestic operation by next January and resume key international routes in the near future, which complies with the government's reopening plan.
