AirAsia Indonesia explores share issuance and debt-to-equity swaps amid funding crunch

In a filing released on Wednesday, AirAsia Indonesia disclosed that it is considering multiple options to shore up its capital base. Options under review include converting trade payables and lease liabilities owed to its controlling shareholders into perpetual instruments that would effectively be treated as equity, as well as launching a rights issue or a private placement. The airline’s efforts are set against a broader financing strain at its parent, AirAsia Group Bhd, which reported a record US$4.1 billion debt load at the end of June and is seeking roughly US$1 billion in refinancing.

The Indonesian carrier’s shares have been suspended since early July after its latest financial statements revealed negative equity. While no final decision has been made, the company says it is still analysing its funding requirements, market conditions, and the practicality of each alternative with shareholders and external advisers. The intended measures aim to strengthen the airline’s capital structure and help it meet exchange listing requirements.