AirAsia Berhad announced yesterday that its subscription agreement with Tune Live Sdn Bhd (Tune Live) has become unconditional pursuant to Tune Live receiving its approval from Bank Negara Malaysia (BNM) for its partial offshore funding.The funding relates to the proposed issuance and allotment of 559 million new ordinary shares in AirAsia Berhad at RM1.80 each.
Bank Negara Malaysia approval was the final condition precedent to the proposed shares issuance.
Payment for the subscription shares shall be made within 60 days, or such other date as the parties may agree, with its issuance and allotment within eight market days after such payment. The new shares issued pursuant to this agreement will rank pari passu to all other existing shares in issue.
AirAsia Berhad had on 1 April 2016 entered into a conditional subscription agreement with Tune Live, an investment holding company owned by AirAsia Berhad Executive Chairman Datuk Kamarudin Meranun and AirAsia Group CEO Tony Fernandes for the proposed shares issuance.
Upon the completion of the proposed shares issuance, AirAsia Berhad will receive cash proceeds of approximately RM1.01 billion. The cash proceeds are to be utilised by AAB principally for the pre-payment and repayment of borrowings, financing of aircraft, engines and parts, pre-delivery payments of aircraft as well as for general corporate and working capital.
The utilisation of proceeds is expected to contribute positively to AirAsia Berhad’s financial position through a more strengthened balance sheet and increased financing flexibility.