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AirAsia Ain’t Dead Yet

Popular budget carrier in talks to raise more than $234 million a day after auditor cited ‘significant doubt’ about its future

Thai Air Asia Jet Flying Thailand Bangkok

The reports of AirAsia’s death are greatly exaggerated.

A day after its auditor said the carrier’s ability to continue as a going concern may be in “significant doubt”, the Malaysia budget carrier announced it was in talks to raise more than 1 billion ringgit (US$234.5 million) in funding.

Like all airlines, AirAsia Group Bhd’s fortunes have crashed during the coronavirus pandemic. On Tuesday, trading in its stock was suspended after auditor Ernst & Young AirAsia’s current liabilities already exceeded its current assets by 1.84 billion ringgit at the end of 2019, a year when it posted a 283 million ringgit net loss.

The groups shares tumbled 18 percent when trading resumed Wednesday, but later in the day AirAsia said it was pursuing several fundraising options and looking to cut cash expenses by half.

“We have been presented with proposals in various forms of capital raising, be it debt or equity, and are in ongoing discussions with numerous parties, including investment banks, lenders, as well as interested investors in seeking a favorable outcome for the group,” the airline said in a statement.

The airline claimed some institutions were open to funding support of more than 1 billion ringgit while some financing would come from a Malaysian government guarantee loan program. AirAsia said subsidiaries in the Philippines and Indonesia also have applied for loans.

Like most airlines, AirAsia has been laying off staff and cutting salaries, as well as working out new payment deals with plane lessors and suppliers.