AirAsia Receives Signed US$1 Bln Financing Term Sheet From Middle East
KUALA LUMPUR, Sept 18 (Bernama) -- AirAsia Group Bhd has received a signed term sheet for US$1 billion (US$1=RM4.10) in financing from the Middle East but is holding off on accepting it as the group seeks the best deal, said co-founder and adviser Tan Sri Tony Fernandes.
“We have a term sheet from the Middle East, a signed term sheet, guaranteed to fund US$1 billion.
“I’m holding off because I want to try and get the best deal. The level of interest is very strong,” he said during a virtual media briefing to provide a business update today.
Fernandes said the funding date had been confirmed and most of the due diligence had been completed.
“A term sheet has been signed and the funding date has been confirmed. They are doing a little bit of due diligence now, but most of it has been done.
“It is up to us now whether we take it or whether we can get a better deal,” he added.
He said that AirAsia is targeting December 2026 or January 2027 to complete the financing exercise, with interest received from several funding sources.
“We have banks from Europe, banks from the United States and local banks. My priority is local banks.
“We have bond investors and Middle East investors as well. The response has been good,” he said.
The proposed US$1 billion financing would be used mainly to refinance expensive borrowings and settle some creditor obligations, Fernandes said while rejecting a foreign news wire report estimating that AirAsia required at least US$3 billion in fresh capital to address its financial position.
“We have been consistent with US$1 billion, which is mostly to refinance expensive loans and clear some of the creditors. That is it. It is mainly to reduce my interest costs so I have more cash. Cash is what is important,” he said.
“Where did this US$3 billion come from? Our accounts are there, our creditors are there and everything is there. It is irresponsible to just pick a figure from the sky. No analyst wrote US$3 billion. No influencer wrote US$3 billion, but the press put US$3 billion,” he said.
Fernandes said AirAsia preferred local bank financing as it would allow the group to reduce its foreign-exchange exposure by matching its borrowings more closely with its revenue currencies.
“All our loans are in US dollar, but my earnings are in baht, ringgit and rupiah. I want to match the loans as much as possible.
“I’m still hoping for a local bank, to be honest. It’s cheaper and it’s less risk-averse,” he added.
-- BERNAMA