Capital A Seeks Rm1 8bil Loan To Refinance Debt Say Sources

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Capital A returned to the black in the second quarter ended June 30 with a net profit of RM1.11 billion from a net loss of RM931.22 million a year ago. (Bernama pic)PETALING JAYA: Budget carrier AirAsia, a part of Capital A Bhd group, is seeking a US$400 million (RM1.8 billion) loan, half of it from private credit funds, to refinance debt, according to people familiar with the matter.
The loan will be in the form of a revenue bond, with investors to be paid out of ticket sales from 10 AirAsia flight routes, the people said, declining to be identified because the matter is private.
A representative of the company declined to comment.
Capital A is no stranger to private credit. Its engineering and maintenance subsidiary Asia Digital Engineering Sdn Bhd in April secured a US$100 million (RM471 million) investment from private-credit provider OCP Asia Ltd, according to a statement at the time.
Asia still accounts for a small percentage of the US$1.5 trillion (RM7.1 trillion) global private credit market, but major players such as Blackstone Inc are targeting growth in the region.
With global airline capacity returning to levels seen before the pandemic and industry earnings rebounding, the aviation industry has become a target for private credit lenders.
The country’s air passenger traffic recovery is projected to accelerate in the second half of 2023 to reach 85% of pre-pandemic levels, according to MIDF Research.
Capital A returned to the black in the second quarter ended June 30 with a net profit of RM1.11 billion from a net loss of RM931.22 million a year ago.
Its quarterly revenue surged 115.75% to RM3.15 billion from RM1.46 billion previously, driven by the revival of air travel during the period.
At market close, Capital A’s share price rose 2.5 sen (2.69%) to 96 sen, giving it a market capitalisation of RM4 billion. - FMT

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