AirAsia Indonesia mulls share sales, liability restructuring

PT AirAsia Indonesia is considering restructuring some liabilities and selling shares as the low-cost carrier seeks to repair a balance sheet that has kept its shares suspended since July.

The airline is mulling converting trade payables and lease liabilities owed to controlling entities or shareholders into perpetual instruments that would effectively count as equity, according to a Wednesday filing. It is also considering a rights issue or a private placement.

The recapitalisation options are unfolding against a much bigger funding squeeze at parent AirAsia Group Bhd, which had a record US$4.1 billion of debt at the end of June and is seeking about US$1 billion in refinancing.

Last month, the group’s co-founder and adviser Tony Fernandes said fresh capital would be injected into the Indonesian and Philippine operations, with new shareholders expected to join affiliates.

Shares of AirAsia Indonesia have been suspended since early July because its latest financial statements showed negative equity. It has not chosen a path yet and is still assessing funding needs, market conditions and the feasibility of each option with shareholders and outside advisers, it said in the filing.

The measures under review are intended to strengthen its capital structure that should also help it comply with exchange requirements, it said.