AirAsia’s share price takes a beating as its PN17 waiver luck runs out

SHARE price of AirAsia Group Bhd nosedived this morning after the budget carrier failed to secure an extension of the relief period from being classified as a Practice Note 17 (PN17) company.

The airline slid to a near limit down level of 55 sen in the first half-an-hour of trading before paring losses to 63.5 sen at time of writing (10.30am), still down 11 sen or 14.77% with 253 million shares traded (the day’s most active stock thus far) which gave it a market capitalisation of RM2.58 bil.

To re-cap, AirAsia Group’s luck ran out after two close shaves with the PN17 classification.

The airline first triggered the PN17 suspended criteria on July 8, 2020 after its external auditors Ernst & Young PLT issued an unqualified audit opinion with material uncertainty relating to going concern in relation to its audited financial statements for the financial year ended Dec 31, 2019 and that its shareholders’ equity on a consolidated basis was 50% or less of its share capital.

Nevertheless, AirAsia Group was spared the rod following the relief measures introduced by Bursa Malaysia and the Securities Commission (SC) on April 17, 2020.

The budget carrier was not classified as a PN17 listed issuer as it was not required to comply with obligations under Paragraph 8.04 and PN17 of the Main LR for a period of 18 months from the date of the first relief announcement.

Altogether, it was saved by two waivers between July 8, 2020 and Jan 7, 2022.

AirAsia has been in the red throughout FY2019 and FY2020 BY posting a net loss of RM283 mil and RM5.89 bil respectively.

For the nine months ended Sept 30, 2021, AirAsia continued to bleed although its net loss has narrowed to RM2.23 bil from RM2.66 bil in the same period of FY2020 while its revenue fell by a third to RM1.02 bil from RM2.97 bil. – Jan 14, 2022

On Dec 29, AirAsia Group said it would complete its renounceable rights issue to its existing shareholders upon listing of its RCUIDS (redeemable convertible unsecured Islamic debt securities) and warrants by end-2021, thus successfully raising RM974.5 mil and providing a strong injection to support the overall group fundraising strategy.

As a key component of AirAsia Group’s fund-raising initiatives, the rights issue will enable the budget carrier to support various segments of the group, including working capital and other operational costs incurred due to the outbreak of the global COVID-19 pandemic and costs required to ramp-up operations to be prepared for the rebound of international travel, balanced with funding growth of the various airasia digital business units. – Jan 14, 2022

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