AirAsia Group has earned gross proceeds of USD56.83 million from a merger between Irish lessor FLY Leasing and Florida-based aviation investment firm Carlyle Aviation Partners, the group said in a statement on August 5.
AirAsia had held a 10.94% stake (3,333,333 shares) in Fly Leasing before the merger. The lessor and Carlyle announced the completion of the USD2.36 billion deal on August 2, following their initial statement of intent to do so in March.
AirAsia Group had acquired the Fly Leasing shares in August 2018 as part of a cash-in-kind consideration for an earlier divestment of the group’s aircraft leasing operations undertaken by its own leasing wing Asia Aviation Capital to entities managed by San Francisco-based lessor BBAM.
The proceeds are “a welcome boost to our overall fundraising strategy,” group CEO Tony Fernandes said.
The AirAsia parent has been trying to raise MYR2.5 billion ringgit (USD593 million) through a combination of borrowing and equity raising since last year, and Fernandes claimed in his August 5 statement that this plan “is on track.”
He said the group had already raised MYR336.5 million (USD79.8 million) from two tranches of private placements earlier this year and continues to renegotiate leasing terms with all of its lessors. It had disposed of 32.67% of its interest in AirAsia India (Bengaluru International), amounting to USD37.68 million, ceased operations at AirAsia Japan (Nagoya Chubu), and sold a number of spare engines amounting to over USD130 million, he recounted.
Other fundraising initiatives are underway to ensure the group has sufficient liquidity, he added, including the finalising of a government-guaranteed loan, “working on a data-backed loan” of up to USD350 million, and preparing for a rights issue of up to MYR1.02 billion (USD242 million) which has a target completion in December.
“We remain optimistic about our ability to not only survive the ongoing effects of the pandemic but to return to the skies stronger than ever in the near future. Domestic air travel is likely to gradually resume in the third quarter of 2021 and international travel should start to take flight in 2022. We foresee a major resurgence in air travel on the horizon due to huge pent-up demand and the acceleration of vaccines, better testing, education, tracing, and the push for digital health passports in all of our key markets,” Fernandes said.